Local investors expanding horizons.

With sky-high core Manhattan prices depleting investors' oxygen, their trusty commercial brokers are joining the bridge and tunnel crowd to ferret out the New Jersey and Connecticut investment scene. Not only are brokers searching the tri-state area, but are catering to client tastes and their previously purchased properties all along the Eastern Seaboard, and even more Westward ho.

"We're seeing a great deal of activity of New York-type investors looking outside of core New York City," said Joseph Farkas, managing director of the CB Richard Ellis Downtown and Long Island offices, where he is bullish. "Rental rates are moving up and investors are being pushed out of New York. There is a lot of juice, and Long Island hasn't had the rent spikes, so investors are seriously looking."

With 27 million square feet of office space and a captive market, Farkas says pension funds, insurance companies and the national real estate investment trusts are examining Long Island's quality Class A properties most of which are very photogenic.

One New York city investor got so serious he is currently buying a "major" project in Garden City through the Long Island CB Richard Ellis office.

"There is so much money out there that they have to expand the boundaries," agreed Andrew Gerringer, senior vice president of the Douglas Elliman Investment Division, who now holds a Connecticut broker's license. "The tri-state area is so close to Manhattan that there is generally interest in the better communities."

But Gerringer hasn't stopped locally, and has already co-brokered deals in states that include Virginia and Georgia. "I see a lot of triple net properties in towns that I haven't even heard of," he admitted. Certain of his clients want them, however, because many single-tenant investment properties in the suburbs house credit tenants that can be financed.

Even local lenders are expanding their horizons. Amalgamated Bank's first vice president, Thomas M. Graf, said they are already considering loans in Rockland County's Pomona area and on lower Westchester County's north-south shopping strip, Central Avenue.

"We traditionally had a big concentration in Manhattan and on the Lower East Side," noted Graf. Now they are seeking arrangements with union-owned banks in Kansas City, Kansas and Albuquerque, New Mexico, among other places Graf has visited. "We would use them for access to other markets and they would use us to make bigger mortgages," he said. Already, Amalgamated has opened a small trust company in California and a retail branch in Washington D.C.'s K Street NW to service the international unions headquartered in the area.

Local investors Steven Witkoff, the Cogswell Realty Group, the Jemals, Bernard Financial and others are already investing in New Jersey, while Westchester and Connecticut has seen several purchases by W&M Properties, which already owns in seven states. Aby Rosen and Michael Fuchs of RFR Holdings picked up a Greenwich, Connecticut property in a deal that was brokered by Newmark & Co. in which Gerringer was involved.

Michael Skurnick, a partner in Cogswell, which invests for its own account and for its institutional partners, says you have to go outside of Manhattan to find the right kinds of deals.

"You have to find value-added projects," he explained. "While the days of just buying, holding and waiting for rents to rise are not over, those deals are exceedingly competitive. You have to go outside of core Manhattan."

Cogswell owns over a million square feet in Newark, and is about to close on a building on 125th Street in Manhattan. They already have a few brokers that hold New Jersey licenses.

With cash to invest from the sale of other properties, W&M's Anthony E. Malkin says they are looking in the Midwest, the Great Lakes, Northeast and Mid-Atlantic regions for apartments and office product. Additionally, they are open to buying city center retail in Boston, Washington, New York, Chicago and San Francisco, where there are high pedestrian counts.

To service clients like them with expanding appetites and horizons, local brokers feel they have to keep up, even if their firms have offices or contacts in other cities.

A couple of years ago, Eastern Consolidated Senior Director Gedaliah Borvick brokered an apartment building in Bergen County, New Jersey.

"I thought it was a one-shot deal," recalled Borvick. "But I started realizing I was doing a number of significant deals in Brooklyn, and the buyers were from Manhattan. And my clientele started looking at alternative opportunities. Once they started doing that, I felt there was vacuum that I could fill because my clientele trusts me, and we have long-standing relationships."

To keep those associations, vet properties for his clients, and of course, keep commissions rolling in, Borvick, an attorney, obtained his New Jersey broker's license. But he was not alone. So did two other Eastern Consolidated brokers, Jeffrey Troy and Dov Hertz.

Over the past year, Borvick has continued to work outside of his Manhattan base, completing major deals in Queens, Brooklyn and Bergenfield, New Jersey.

His clients have also been "eyeing" deals in Connecticut, and if the trend continues, he says, Eastern will be soon brokering deals throughout the Atlantic seaboard.

"I have to go where the clients wants to invest," he said. "The types of returns that one was getting in Manhattan don't exist in Manhattan, and don't even exist within one hour of Manhattan. There is still more out there, and for a savvy investor who doesn't want to spend top dollar, it's time to look nearby."