As we dive into the vibrant commercial real estate scene of the Hamptons, I’m thrilled to sit down with Luca Calarailli, a seasoned expert in construction, design, and architecture. With a deep passion for integrating technology into the industry, Luca brings a unique perspective on the iconic retail building at 716 Montauk Highway, currently on the market for nearly $10 million. Located in the heart of downtown Montauk, this property is touted as the premier retail space in the area. Our conversation explores the building’s prime location, standout features, recent upgrades, tenant dynamics, financial appeal, and its role in Montauk’s bustling commercial landscape.
What makes the location of 716 Montauk Highway on Montauk Plaza so exceptional compared to other spots in downtown Montauk?
I think it’s all about the unparalleled visibility and centrality. Sitting right on Montauk Highway with 120 feet of frontage, this building is impossible to miss. It’s in the beating heart of Montauk’s business district, surrounded by popular spots like Memory Motel and Hampton Coffee Company. This kind of positioning draws both locals and tourists naturally, making it a hub for foot traffic that few other downtown locations can match.
How does the building’s prominent frontage on Montauk Highway influence its appeal to businesses and investors?
That 120 feet of frontage is a game-changer. It’s like having a giant billboard for your business—every car and pedestrian passing by can’t help but notice it. For retailers, this translates to constant exposure, which is critical in a seasonal market like Montauk where capturing attention quickly matters. For investors, it means the property holds inherent value because businesses will always compete for that kind of visibility.
Why do you consider this property the ‘premier retail building’ in Montauk’s business area?
It’s a combination of factors, really. The sheer scale at 9,600 square feet sets it apart—there aren’t many commercial spaces in Montauk with that kind of footprint. Add to that its modern design and prime location, and it becomes the gold standard for retail in the area. It’s not just a building; it’s a landmark that defines downtown Montauk’s commercial identity with a presence that’s hard to replicate.
Can you share some insights into the building’s history and the upgrades it has seen since being built in 1997?
Built in ‘97, this property was already a significant addition to Montauk’s retail scene, but it’s evolved over the years to stay relevant. It’s had thoughtful upgrades to maintain its functionality and appeal. The most notable changes came during the 2019 renovation, where the focus was on modernizing the structure while preserving its commercial viability. These updates have kept it competitive in a market that’s always changing.
What specific enhancements were made during the 2019 renovation, and how have they impacted the property’s standing?
In 2019, the building got a major facelift with a striking, contemporary facade that really makes it pop in Montauk’s retail landscape. Beyond aesthetics, there were practical improvements to the interior spaces to accommodate modern retail needs. This renovation cemented its status as a standout property—it’s not just functional but also visually impressive, which helps attract high-quality tenants and boosts its investment potential.
How do the current tenants contribute to the property’s value and appeal?
The tenant mix is a big strength. You’ve got established names like MTK Lobster House and Montauk Tattoo, alongside others like Blue Crush and Montauk Surf and Sports. They bring a diverse range of offerings—dining, lifestyle, and retail—which creates a balanced draw for different customer types. This variety not only stabilizes income for investors but also makes the building a destination in itself, enhancing its overall appeal.
With the building currently 67% leased, what types of businesses are you hoping to attract for the remaining space?
We’re looking for businesses that complement the existing mix and can thrive in Montauk’s unique market. Ideally, dry retailers or lifestyle brands that cater to both the local crowd and the seasonal influx of visitors. The goal is to maintain that diversity of offerings, ensuring the building remains a go-to spot for a wide audience while maximizing the potential of the available space.
Can you tell us more about the available 3,200-square-foot ground-level space and the flexibility it offers?
Absolutely. This ground-level space is a fantastic opportunity at 3,200 square feet, and it’s got the added flexibility of being divisible into two smaller units of about 1,450 square feet each. This setup allows us to cater to different business needs—whether it’s a larger retailer looking for a flagship presence or smaller boutiques wanting a foothold in Montauk. It’s priced competitively at $9,750 per month if split, making it accessible for a range of tenants.
How was the asking price of $9.975 million determined, and what does it reflect about the property’s value?
The price, which breaks down to about $1,039 per square foot, was set based on a careful analysis of the Montauk market, the property’s unique attributes, and its income potential. Factors like the prime location, size, and recent renovations play a huge role. It also reflects the scarcity of large-scale commercial spaces in the area—this isn’t something you find every day, so the price captures that rarity and the strong demand for such assets in the Hamptons.
How does this property’s pricing compare to other retail investments in the Hamptons or on the South Fork?
At just under $10 million, it’s positioned as one of the top retail properties on the South Fork, second only to a mixed-use complex in Southampton Village listed at $21.9 million. When you look at the per-square-foot cost, it’s competitive for Montauk, especially given the visibility and scale. Compared to other Hamptons markets, it offers a unique blend of size and location at a price point that’s still attractive for serious investors looking for a foothold in this iconic area.
What makes the diversified income stream from the current tenants such a compelling feature for potential investors?
The diversity of tenants—ranging from restaurants to retailers—creates a robust income stream that’s less vulnerable to market fluctuations. If one sector, say dining, takes a hit, the lifestyle or retail tenants can help balance things out. This stability is gold for investors, especially in a seasonal market like Montauk where cash flow can vary. It reduces risk and offers a more predictable return on investment, which is a huge draw.
What is your forecast for the future of commercial real estate in Montauk, especially for high-profile properties like this one?
I’m optimistic about Montauk’s commercial real estate market, particularly for standout properties like 716 Montauk Highway. The area continues to grow as a year-round destination, not just a summer spot, which drives demand for premium retail spaces. I expect high-profile properties to see sustained interest from both tenants and investors, as Montauk solidifies its reputation as a key commercial hub in the Hamptons. The challenge will be balancing growth with the town’s unique charm, but I believe properties like this will remain at the forefront of that evolution.
