JP Morgan to sell LI building.

JP Morgan Chase has decided to sell 1985 Marcus Avenue, a Long Island office building that the firm has used to house various back office functions since it purchased the property in 1982.

Sources say that the financial firm hasn't yet hired a broker to handle the sale, but that it will likely execute a transaction in which it can leaseback as much as 75,000 s/f of the building's 310,000 s/f.

The deal will free a block of space that brokers indicate will continue to be attractive to back office space users even though new office developments are springing up just down the street.

Lalezarian Properties is nearly done constructing a 188,000 s/f office building at 1991 Marcus Avenue, only a few buildings away from 1985 Marcus Avenue. The property is the second phase in a project that began with the development of neighboring 1999 Marcus Avenue. Together, the two buildings will comprise a 300,000 s/f complex called The Granite Buildings. Lalezarian Properties has already fully leased the first property and has tapped a CB Richard Ellis team led by Richard Karson, an executive vice president for the firm on Long Island, to fill the other property, which will be ready for occupancy in April. Karson indicated that the soon-to-be available block of space at 1985 Marcus Avenue--whose rents would likely be in the $20s per s/f--wouldn't impede Lalezarian from securing rents in the mid $30s per s/f that the firm has been targeting for The Granite Buildings.

1985 Marcus Avenue and The Granite Buildings are meant to cater to different users and highlight the gulf that has emerged on Long Island between the quality of the area's existing office space and that of new construction that is being developed.

"There is a flight to quality," Karson said. "Class A office product in Long Island is actually very scarce so when buildings like The Granite Buildings come online, they are incredibly attractive to tenants who are willing to pay a little more to have excellent space."

The Granite Buildings' success so far supports this notion that Long Island isn't just a repository for back office functions, which can include accounting, administrative, billing and various other departments within a company that support it operations but don't require the extraordinary amities and status that come with a prestigious address.

Located in one of Long Island's strongest office markets, Lake Success, the Granite Buildings will likely be home to more front office operations than other properties in the area have typically attracted, especially now that a true back office building is sitting ready and waiting just down the street.