Village: Going, Going . . .

This is the fourth article in a series examining various aspects of real estate on the South Fork.

Whether you're talking about residential or commercial real estate, a limited supply and a demand for prime location are making East Hampton Village properties, well, in demand.

The dearth of undeveloped residential land puts a premium on the few vacant lots that do exist and creates a burgeoning market for potential "teardown" properties. As for commercial activity, the desire to have a presence in the small but ever more glitzy business district along Main Street and Newtown Lane continues to bring in high-visibility tenants and even higher rents.

What's that popular saying in the real estate industry? Location, location, location . . .

Stores All Taken

"The village is one of the hottest areas in the Hamptons," Kim Hovey, the owner of the Mrs. Condie Lamb Agency in East Hampton, said this week. "People are willing to pay top dollar for it." That goes for both residential and commercial properties.

"Everything's supply and demand," said Judi Desiderio, the managing partner of Cook Pony Farm, which has several offices on the East End.

Virtually all commercial space in the village is rented for the fast-approaching summer season except for the small shops in the former Veterans of Foreign Wars building, which now houses the eye-catching London Jewelers. Earlier this spring, however, there were at least four vacant stores available, which, brokers said, may have kept rents from soaring over the moon.

What Determines Price

The number of vacancies is just one of several factors affecting prices. Among others: the size of the space (under 1,000 square feet costs proportionately more than larger space); proximity to the Main Street-Newtown Lane intersection (rent increases the closer you get; Dr. Alan York's building at No. 1 Main, right on the corner, is said to bring the highest rent in the village), conditions imposed in the lease, and the actual physical condition of the space.

Stores that were leased to new tenants this spring, said Ms. Desiderio, did not rent for as much as the landlords had expected. That's not to say they got less than in the past, but simply that tenants were not willing to pay as much as the owners had thought they would.

Rents can only go up so much, Ms. Desiderio suggested.

Per Square Foot

An optimistic David Fink, the owner of three Main Street commercial properties and a real estate attorney in Manhattan who also lives in Wainscott, said his rentals were what he thought they would be.

However, Ben Krupinski, who owns the former Brooks building on Pantigo Road, told The Star he had rented that retail space (to Plaza Sports) for less than market value. The building is just past the main shopping area.

Rents in the business district range from about $45 a square foot to $70 per square foot. Few disagree that these prices have made it virtually impossible for individually owned and operated stores to do business in East Hampton Village.

Metamorphosis

Except for a few old standbys like White's, Dreesen's, Mark Fore and Strike, and the two hardware stores, the metamorphosis of Main Street and Newtown Lane in the past two decades is almost complete.

Gone are the locally owned shops. In their place have come high-end stores often associated with metropolitan or national chains.

In East Hampton Village, buyers are buying for the land, not for the buildings on it.

Marley's is gone, along with the News Company, the Whitman Gallery, even the East Hampton Shoe Store (now on Park Place), to be replaced by Kenar, Ralph Lauren Polo, McCarver and Moser, and the soon-to-open Cynthia Rowley.

Residential Property

As for East Hampton houses and residential properties, they are in demand not just because of the popularity of the Hamptons but because of their proximity to village attractions - tony shops, the movie theater, the beach, a train station, and the Hampton Jitney stop.

"The village . . . is a location," said Dick Baker, the office manager of Amaden-Gay Realty in East Hampton. Clients tell him, "I want to walk to get the paper, I want to walk to the movies. . . . "

In residential real estate, little empty land on which to build means people are either renovating and adding onto what they buy or simply tearing down the old to build anew.

The village offers "vastly different" properties, said Mr. Baker, ranging from small lots and houses on side streets for about $200,000 to large estate-section abodes south of the highway going for as much as $10 million.

North Of Highway

Even properties north of the highway "are very much in demand," said Mr. Baker, noting that houses in the village make great investments for people who'd like to rent for a month or a season and live here themselves the rest of the time.

On the lower end, Mr. Baker recently sold a house on Maidstone Avenue for $250,000. The buyer is putting another $175,000 into renovations and additions, said the real estate broker.

In other words, if you can't find the house you want, or even an affordable vacant parcel to build on, you work with what's available.

"There is precious little" vacant land left in the village, said Mr. Baker. In East Hampton, the estate section is considered relatively small compared to Southampton or Bridgehampton.

People are buying developed estate section lots and either doing major renovations or, in some cases, tearing down existing houses and starting from scratch.

The bottom line: Buyers are buying for the land, not for the buildings on it.

Ms. Hovey cited a Cottage Avenue house bought not long ago for $1.6 million. Four or five months later, without a single alteration, it was sold for $2.1 million. The newest owners, she said, didn't buy because it was their dream house, but because of the location.

Christie Estate

Vacant parcels off Montauk Highway in the village, between Georgica and Jericho Roads, are being sold by John Shanholt, an East Hampton broker. According to recorded deeds, they are selling at under $200,000, relatively low prices, probably because of their proximity to the noisy highway.

Ms. Hovey's real estate company, itself located in a village office, has the exclusive on lots in the former Christie estate, a 10-lot subdivision between David's and Pondview Lanes that contains some of the village's last vacant land.

The lots range from 1.4 to 2.5 acres, with asking prices from $950,000 to $1.4 million. One has been sold and another is in contract, Ms. Hovey said.

The broker said the subdivision's ideal location (it is within walking distance of the Maidstone Club, she noted) made those prices realistic, and the development's preserved hedgerow and easements made it that much more desirable.