Church of Scientology buys Long Island office property for $15.2M

City officials remain skeptical about the rest of Rodney Riley’s plans, which are deemed too intense.

Long Island Business News/March 14, 2024

By David Winzelberg

The Church of Scientology has purchased an office property in Melville for $15.2 million.

The California-based church bought the 62,500-square-foot office building on 5.5 acres at 263 Old Country Road.  

Built in 1999, the two-story office building, which has parking for about 250 vehicles, was delivered vacant. The property had been the longtime home of ADI Global, a distributor of security products, before the company relocated to 275 Broadhollow Road in 2021.

Scientology, which owns properties throughout the U.S. and in several other countries totaling many millions of square feet, according to published reports, has been leasing offices in Bethpage, but the Melville property is its first major commercial real estate acquisition on Long Island.

Public records list the property taxes on 263 Old Country Road at $285,065, and while Scientology is a tax-exempt organization, it has yet to apply for tax-exempt status on the Melville office property, according to the Town of Huntington Assessor’s Office.

A property management official with the Scientology organization did not respond to requests for comment on the Melville purchase, which closed last month.

The Melville deal is the second major Long Island office property sale to a religious organization in the last 14 months. In Dec. 2022, the Christian Congregation of Jehovah’s Witnesses bought the 236,365-square-foot office building on 20 acres at 750 Woodbury Road in Woodbury for $27 million. The Wallkill, N.Y.-based religious organization plans to spend at least another $23 million to build an assembly hall and two support buildings on about half of the site and is selling the remaining 10.23 acres.

The Melville building sold for about $243 a square foot, a relatively healthy number, considering the recent $16 million sale of the 111,067-square-foot office building at 534 Broadhollow Road, which was 82 percent occupied and sold to a real estate investment firm for about $100 less per square foot. In fact, several recent sales of office buildings in western Suffolk County have ranged from $130 to $155 a square foot. Those acquisitions had some vacancies and required some capital improvement, which needs more of a spread between risk and return and results in a lower purchase price.

And brokers say that end-users will typically pay more for an office building than investors will, especially if the use is not traditional office, such as medical, religious or a data center. That’s because there is substantial risk for investor owners when a lease comes due, which isn’t the case for an end-user.

Roy Chipkin of CBRE represented the buyer, while the seller, Harvest 263 Old Country Road LLC, was self-represented in the Melville sales transaction.

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