Category: Market Info

Higher income individuals are subject to a 3.8-percent tax on their net investment income (NII). In addition to traditional portfolio income, the NII tax applies to income and capital gain from rental real estate, unless that income or gain is derived from a non-passive trade or business. Determining whether your rental real estate activities are exempt from NII tax is more complicated than you might think. Here are several questions you need to ask:

Does the tax apply to you?

The first step is to determine whether you’re subject to the NII tax at all. The tax applies only if your modified adjusted gross income (MAGI) exceeds a specified threshold. Currently, the threshold is $200,000 for single filers and heads of household, $250,000 for joint filers, and $125,000 for married taxpayers filing separately. Generally, MAGI is equal to your adjusted gross income (AGI), unless you have foreign earned income, in which case certain adjustments are required.

The NII tax also applies to trusts and estates, but the threshold is much lower: The tax applies once undistributed AGI tops $12,400.

If you’re subject to the tax, it applies to your NII or to the amount by which your income exceeds the threshold, whichever is less. Suppose, for example, that a married couple filing jointly have MAGI of $325,000 and $100,000 of NII. Their tax liability is 3.8% of $75,000 (the excess of their MAGI over the threshold), or $2,850.

Do you have net investment income?

The next step is to determine whether you have NII that’s subject to the tax. Remember, the tax applies to net investment income, which is equal to gross investment income reduced by allocable expenses, such as interest expense, management fees, professional fees, and certain taxes. If your NII is zero or negative, then the tax doesn’t come into play.

Do you have rental income?

If your rental properties are operating at a loss, or you sell rental properties at a loss, the status of your rental activities as a non-passive trade or businesses is irrelevant for NII tax purposes. [Although it may be relevant for purposes of the passive activity loss (PAL) rules.] On the other hand, if you have rental income or net capital gains from the sale of rental properties, there may be an opportunity to reduce or eliminate NII taxes if your rental activities are properly characterized as a non-passive trade or business.

Are you a real estate professional?

For purposes of the NII tax, the character of your rental real estate activities is determined by reference to the PAL rules. Under those rules, rental real estate activities are deemed to be passive, regardless of your level of participation. There’s an exception, however, for qualified real estate professionals. To qualify, you must spend:

• More than 50 percent of your working time on “real estate businesses” in which you materially participate; and

• More than 750 hours during the year on such businesses.

Real estate businesses include development, acquisition, construction, rental operation, management, leasing and brokerage businesses. Note that services you perform as an employee don’t count toward the above thresholds unless you own five percent or more of the business.

Do you materially participate in rental activities?

Even if you’re a qualified real estate professional, your rental activities aren’t necessarily non-passive. You must also demonstrate that you materially participate in those activities, which means your involvement is “regular, continuous and substantial.” Proving materiality can be a challenge, so the tax regulations provide several objective tests you can use to demonstrate material participation. For example, you materially participate in an activity if:

• You spend more than 500 hours on the activity during the year.

• You spend more than 100 hours on the activity during the year and no other person spends more time on the activity than you.

• You’re the only participant.

• You materially participated in the activity during any five of the preceding 10 tax years.

• You spend more than 100 hours on the activity during the year, and your participation in all such “significant participation activities” totals more than 500 hours.

Although each rental property is considered a separate activity, you can elect to aggregate all of your rental properties in order to satisfy the material participation requirement. Keep in mind, however, that doing so may have other, unintended tax consequences.

Are you operating a trade or business?

To avoid NII taxes, rental income or gain must be attributable to a non-passive trade or business. In other words, it’s not enough to demonstrate that an activity is non-passive; you must also establish that it rises to the level of a trade or business.

There’s no definition of “trade or business” in the regulations; it depends on the facts and circumstances. Arguably, in most cases, demonstrating material participation in an activity should be enough to satisfy the trade-or-business requirement. In addition, the NII tax regulations also provide a safe harbor: Rental activities are deemed to be a trade or business if you participate in them for more than 500 hours or if you met the 500-hour threshold in five of the 10 preceding tax years.

What about trusts?

What if rental real estate is held in a trust? In that case, as noted above, the NII tax kicks in once the trust’s undistributed AGI exceeds $12,400. One strategy for avoiding the tax is to ensure that the trust’s rental income is treated as income from a non-passive trade or business. The U.S. Tax Court has ruled that a trust can qualify as a real estate professional and materially participate in a trade or business by virtue of its trustees’ activities. To achieve this treatment, consider naming one or more active participants in your rental real estate businesses as trustees.

Consult your advisors

The 3.8-percent NII tax may apply to rental income and to capital gains from the sale of rental real estate. You’re exempt from the tax, however, if you’re a qualified real estate professional and rental activities constitute a non-passive trade or business. Your advisors can help you determine whether you’re subject to the tax and, if so, identify strategies for mitigating it.

CarMax is asking Smithtown Town to rezone property at the northwest corner of Middle Country Road and Montclair Avenue in St. James to allow a used-car dealership. This is from May 13, 2016. (Credit: James Carbone) An application under consideration by the Smithtown Town Board to rezone an 18-acre parcel at Middle Country Road and Montclair Avenue could bring the first local branch of a national used-car dealership to St. James.

The parcel, currently used by manufacturer Smithtown Concrete, is zoned for light industrial. Richmond, Virginia-based CarMax is seeking to rezone the site to wholesale and service industry in order to build its dealership. “CarMax identifies areas that reach customers not currently served by our unique and stress-free shopping experience and has identified the St. James area as being a good fit for our current growth plan,” said spokeswoman Lindsey Duke in an email.

CarMax has about 160 dealerships nationally and has plans to grow at a pace of about 13 to 16 new locations annually, though building a new store may take up to two or three years, Duke said. The Smithtown Town Planning Department and the town planning board have both recommended approving the CarMax application subject to conditions such as providing vehicular access to the traffic signal at Highway Place, preventing access to residential Browning Street, and filing a covenant limiting the use of the site to a motor vehicle showroom.

The Smithtown Town Board is expected to hold a public hearing on the application at its June 23 meeting. Smithtown Planning Director David Flynn noted in a memo to the planning board that the site “is in a suitable location for the proposed use” with “good access in that it fronts on a primary arterial highway with potential access to a traffic signal.” Flynn also said the application seems to fit in the area, where numerous car dealerships line Middle Country Road. “There isn’t a lot of demand for [light industry] use in that part of the town, and CarMax fits in with the other uses in the area,” he said in a phone interview,

In 2014, a developer proposed building a 260-unit, four-story apartment complex at the site, but pulled the plan after public concerns about traffic, the project’s scale and safety. Resident Joanne Rooney, who lives in the Fifty Acre Glenn section of St. James and who attended the town planning board hearing in March on the application, said she supports the CarMax project. “I think it’s a good proposal for the site. They were originally going to build apartment complexes and they were going to encroach onto our development,” she said. “CarMax was very good with me and knew the concerns of the community.” She added, “They’re as good a neighbor as the other dealerships. If I was against car dealerships, I couldn’t live in the area.”

The new owner of mattress retailer Sleepy’s plans to keep open its large office and warehouse in Hicksville, though some employees there have been told they will be laid off, a top executive said on Monday, May 16, 2016. (Credit: Howard Schnapp)

The new owner of mattress retailer Sleepy’s plans to keep open its large office and warehouse in Hicksville, though some employees there have been told they will be laid off, a top executive said.

Adam Blank, president of Sleepy’s, said, “While there will be some natural job loss due to the acquisition, we have made a number of long-term employment offers working out of the Hicksville office, with more on the horizon.” He added, “We are actively hiring new employees to work out of the Hicksville corporate office.” He did not provide numbers, in terms of those losing jobs and those being hired.

The mattress chain had 636 employees at the 450,000-square-foot Hicksville office and warehouse last year, according to a report from Empire State Development, the state’s primary business-aid agency. ESD provided a $1.5 million grant to Sleepy’s in 2010 to support the Hicksville facility. In February, Mattress Firm Holding Corp. of Houston announced plans to purchase Sleepy’s for $780 million. The deal has since closed. “Mattress Firm and Sleepy’s have no intention of closing the New York corporate headquarters and warehouse in Hicksville,” Blank said in a statement last week. “We have a long-term lease on the facility and will continue to make deliveries from the Hicksville facility supporting our store locations from New York City to Montauk.”

He also said the workers being laid off would be notified “with ample time” and that the company would provide a severance package and job placement services. Sleepy’s, founded 84 years ago, has about 3,400 employees, including those at its stores.

201 Old Country Road, Melville

CurvePay, a payment processing company, leased 6,800 square feet of office space at 201 Old Country Road in Melville. Phil Shwom of Schacker Realty represented the tenant while Scott Berfas, Dan Oliver and Jordan Oliver of Newmark Grubb Knight Frank represented landlord 201 Metro in the lease negotiations.

55 West Ames St., Plainview

Central Nassau Guidance and Counseling Services, a provider of health services, counseling and guidance, leased about 22,000 square feet at 55 West Ames St. in Plainview. Jason Miller and Jeffrey Schwartzberg of Premier Commercial Real Estate represented the tenant, while David Hunt of Hunt Corporate Services represented landlord 55 Ames Court LLC in the lease transaction.

140 Eileen Way, Syosset

PPT, a provider of physical therapy services, leased 3,000 square feet at 140 Eileen Way in Syosset. Jatinda Singh of
La Rosa Realty New York represented the tenant, while Jeffrey Schwartzberg and Jason Miller of Premier
Commercial Real Estate represented landlord 3G Eileen Way LLC in the lease negotiations.

55 Kennedy Drive, Hauppauge

Home Bay Trading, a discount-store wholesaler, bought a 111,000-square-foot building on 5.6 acres at 55 Kennedy
Drive for $8.2 million. The company is relocating from Brooklyn and was assisted with economic incentives from the
Suffolk County Industrial Development Agency. Scott Berfas and Jack O’Connor of Newmark Grubb Knight Frank
represented the buyer and the seller, 55 Kennedy Drive Realty, in the sales transaction.

 

Long Island’s industrial and office real estate markets seem to be heading in opposite directions, according to justreleased first quarter statistics.
A still tight supply of available properties has put a crimp in leasing activity in the area’s industrial market so far this year. There was about 512,000 square feet of industrial space leased in Nassau and Suffolk counties in the first quarter, as reported by Cushman & Wakefield. That’s only a little more than half the 988,000 square feet of industrial leasing activity recorded in Q1 2015.
The largest industrial lease of the first quarter was the 156,000 square feet at 201 Grumman Road West in Bethpage leased to Amazon for its first-ever Long Island warehouse and distribution center. But that deal represented nearly 31 percent of the total activity for the quarter as larger buildings with high ceilings are becoming harder to find.
“The limited supply is starting to reduce the volume of deals,” said Kyle Burkhardt of Cushman & Wakefield Long Island. The slowdown in activity put a damper on absorption. Overall net absorption of industrial space remained a positive 213,000 square feet, but was 17 percent lower than the 255,700 square feet absorbed in the first quarter a year ago. As for industrial property sales, those are down, too. In the first quarter of this year there was a paltry 121,400 square feet in sales to end users, a drop of 75 percent from the 484,000 square feet in end-user sales in Q1 2015.
“Sales should be way down because there’s no product,” said Jeffrey Schwartzberg of Premier Commercial Real Estate. “It’s not for lack of demand. There are plenty of customers out there.”
The demand for Long Island industrial space continues to be driven by end-users from New York City, especially those being displaced from Brooklyn and Queens, where investors and developers are scooping up properties for record prices.
“It’s a great time to be an owner,” Schwartzberg said while discussing the industrial market. “It’s tough to be a buyer or a tenant today.”
As a result, prices for industrial properties here have climbed and are now approaching prices for office properties, which have fallen in the last few quarters. While the customers for industrial properties are almost exclusively end users, the office market is driven by investors who aren’t seeing enough returns from stagnant rents.
“Office rents have remained stable over the last 20 years while operating expenses, real estate taxes and tenant build-out costs have all substantially increased,” said Brian Lee of Newmark Grubb Knight Frank.

“The net operating income has declined putting pressure on prices.”
There’s also a difference in demand, highlighted by the disparity in current vacancy rates–7.5 percent for industrial and 16.6 percent for office.
First quarter leasing activity for Long Island office at just over 75,000 square feet was off a whopping 81.5 percent from Q1 2015, according to Cushman & Wakefield numbers.
One bright spot for the office market is the area’s Class A vacancy rate, which has trended lower during the past year. Long Island’s Class A vacancy rate was 13.1 percent in the first quarter of 2016, down significantly from the 16.2 percent vacancy rate of a year ago, according to JLL. However, in contrast to the lack of available industrial properties, there are plenty of office buildings for sale here.
“There are more office buildings coming on the market,” said Tom Attivissimo of Greiner-Maltz of Long Island. “And office prices are dropping to where the price per square foot is the same as for industrial.”
While acknowledging that the Island’s overall office market is somewhat challenged, broker Don Catalano of Optimize Realty is optimistic that an improving economy and higher employment are stabilizing factors.
“There are significant pockets of vacancy in Melville and in Hauppauge,” Catalano said, “but we expect that these will be absorbed over the next 12 to 18 months if conditions remain the same.”

POWER BROKER AWARD WINNERS

Winners Presented alphabetically.

Top Leasing Firms

Ashlind Properties

Augenbaum Realty Corp.

CBRE

Coldwell Banker Commercial Island Corporate Svcs.

CPEX Real Estate

Cushman & Wakefield

Hunt Corporate Services, Inc.

JLL

Kalmon Dolgin Affiliates, Inc.

NAI Long Island

Newmark Grubb Knight Frank

Premier Commercial Real Estate

Ripco Real Estate

Schacker Real Estate Corp.

Sholom & Zuckerbrot Realty, LLC

Top Sales Firms

Cushman & Wakefield

DY Realty Services, LLC

Kalmon Dolgin Affiliates, Inc.

Marcus & Millichap

Metro Management

Pinnacle Realty of New York, LLC

PKG Associates Inc.

TerraCRG

The Moshe Group

Weissman Realty Group, LLC

Top Office Leasing Brokers

Ralph C. Guiffre          CBRE

Philip M. Heilpern      CBRE

David G. Hunt             Hunt Corporate Services, Inc

John A. LaRuffa          NAI Long Island

Jason Miller             Premier Commercial Real Estate

Robert Seidenberg      CBRE

Kraig L. Silver              The Treeline Companies

 

TOP RETAIL LEASING BROKERS

Josh Augenbaum            Augenbaum Realty Corp

James Avallone                DJM Real Estate

Ryan Condren                  CPEX Real Estate

Simon Dallimore             Dallimore & Co.

George Danut                   CPEX Real Estate

Stuart Fagen                     Sabre Real Estate Group LLC

Daniel Glazer                    Ripco Real Estate

Jeffrey Howard                Ripco Real Estate

Theo Kontis                      Harvest International

Nicole S. Liebman           Cushman & Wakefield

Shawn Mullahy                MySpace NYC

Jerome J. Norton            Jenor Realty Co. Inc

Jason Richter                   DJM Real Estate

Peter B. Schubert            TerraCRG

Adam Stupak                    Task Realty

 

TOP INDUSTRIAL LEASING BROKERS

Felice Bassin                      Rentar Development Corp

Gary J. Chimeri                 Alliance Real Estate Corporation

Richard J. Cohen              Ashlind Properties

Leo Farrell                          Coldwell Banker Commercial Island Corporate Svcs

Daniel T. Gazzola               Newmark Grubb Knight Frank

David G. Hunt                    Hunt Corporate Services, Inc

Edward F. Pidgeon            Coldwell Banker Commercial Island Corporate Svcs

Brian Pinnola                      NAI Long Island

Fred Rufrano                       Kalmon Dolgin Affiliates, Inc

Peter B. Schubert                TerraCRG

Jeff Schwartzberg        Premier Commercial Real Estate

Philip Shwom                      Schacker Real Estate Corp

Jeff Star                                Schacker Real Estate Corp

Tom Tsiolis                          Long Island Industrial Group

Nick Zweig                           Locations Commercial Real Estate, Ltd

 

TOP SALES BROKERS

Michael Amirkhanian       Cushman & Wakefield

Ofer Cohen                          TerraCRG

Paul K. Gruber                    PKG Associates, Inc

Adam J. Hess                      TerraCRG

Brendan Maddigan            Cushman & Wakefield

Moshe Majeski                    The Moshe Group

Stephen Palmese                 Cushman & Wakefield

Shaun Riney                         Marcus & Millichap

Samuel Rottenberg             Metro Management

Mellissa Warren                  TerraCRG

 

745 Caleb’s Path, Hauppauge

Monaco Hu, a furniture company, purchased a 36,000-square-foot building on 2.5 acres at 745 Caleb’s Path in Hauppauge for $3.2 million. Richard Cohen of Ashlind Properties represented the buyer and the seller, Savoy Medical Supply, in the sales transaction.

1615 Ninth Ave., Bohemia

Ameristar Energy leased 1,700 square feet of office space at 1615 Ninth Ave. in Bohemia. Michael Zere of Zere Real Estate Services represented the tenant and the landlord, Gelsomnia LLC, in the lease transaction.

856 Johnson Ave., Ronkonkoma

Diamond Construction Group, a general contracting company specializing in kitchen and baths, leased 1,500 square feet of office space at 856 Johnson Ave. in Ronkonkoma. Michael Zere of Zere Real Estate Services represented the tenant and the landlord, Bruno LLC, in the lease transaction.

154 Toledo St., Farmingdale

Certus Controls, which specializes in building automation products, purchased a 6,400-square-foot flex building at 154 Toledo St. in Farmingdale for $1.09 million. Harris Rousso of Real Estate Strategies represented the buyer and Mario Asaro of Industry One Realty represented seller Tajon LLC in the sales transaction.

120 Fairchild Ave., Plainview

Nina Massini, a clothing distributor, leased 7,609 square feet at 120 Fairchild Ave. in Plainview. The company is relocating from Manhattan. Jeffrey Schwartzberg and Jason Miller of Premier Commercial Real Estate represented the tenant and the landlord, Adams Fairchild Realty, in the lease transaction.

20 Railroad St., Huntington Station

Super Sweep, a broom manufacturer, leased 25,000 square feet at 20 Railroad St. in Huntington Station. Jeffrey Schwartzberg and Jason Miller of Premier Commercial Real Estate represented the tenant and the landlord, RRA Associates of Huntington Station, in the lease negotiations.

80 Gordon Drive, Syosset

H&M USA, which distributes raw materials to nutraceutical companies, leased a 35,000-square-foot building at 80 Gordon Drive in Syosset. The company is relocating from Plainview. Ralph Perna of Newmark Grubb Knight Frank represented the tenant and the landlord, Gordon Nassau Realty, in the lease transaction.

10 Technology Drive,  East Setauket

Eating Evolved leased 6,500 square feet of industrial space at 10 Technology Drive in East Setauket. Brian McGuire from Coldwell Banker Commercial Island Corporate Services represented the tenant and Eric Dorf was the in-house representative for landlord Dorf Associates in the lease negotiations.

144 Kroemer Ave., Riverhead

MJ Moving & Storage leased 5,000 square feet of industrial space at 144 Kroemer Ave. in Riverhead. Brian McGuire from Coldwell Banker Commercial Island Corporate Services represented the tenant, while Jake Watral was the in-house representative for landlord Kroemer Avenue Holdings in the lease transaction.

191 Montauk Highway, Sayville

Suffolk Federal Credit Union leased 2,030 square feet at 191 Montauk Highway in Sayville. The branch office is expected to open in late spring. Brian Wynne of Coldwell Banker Commercial Island Corporate Services represented the tenant and Melissa Naeder of Sabre Real Estate Group represented landlord Circle Court Holding in the lease transaction.

865 Waverly Ave., Holtsville

Harvest Bakeries, which makes muffins and cakes for wholesale and retail distribution, purchased a 24,000-square-foot building on 5 acres at 865 Waverly Ave. in Holtsville for $2.6 million. The company is relocating from Central Islip. Ralph Perna of Newmark Grubb Knight Frank represented the buyer and seller, Landmark Realty Holtsville, in the deal.

The entrance to the Fougera Pharmecuticals facility at 60 Baylis Rd. in Melville, A manufacturer of skin creams, ointments and lotions wants to combine two local factories into one large operation in Suffolk County, in a plan that will preserve nearly 400 jobs, officials said Thursday. Fougera Pharmaceuticals Inc. will make $89 million in improvements to its plant at 60 Baylis Rd. in Melville over the next few years so that work now done at 55 Cantiague Rock Rd. in Hicksville can be moved. The company on Thursday secured $3.7 million in tax breaks over 15 years from the Suffolk County Industrial Development Agency in return for promises to preserve its workforce and invest in the Melville factory. The company also will receive a $2 million grant from Empire State Development, the state’s primary business-aid agency, and intends to seek cheap electricity from the state Power Authority, officials said.

Fougera plans to add 30,000 square feet to the Baylis Road building, which is now 167,000 square feet. The company is owned by Sandoz Inc. of Germany, which specializes in generic skin medicines. Sandoz is a division of the giant Swiss drugmaker Novartis AG.

Fougera’s local plant consolidation comes as Novartis has shut down operations in Germany, India and Brazil to reduce expenses, according to a regulatory filing. In its request for tax breaks, Fougera said it had considered leaving New York State for Colorado, North Carolina or New Jersey.

 “The Melville alternative has to remain profitable while simultaneously proving attractive when compared to the lower cost environment of the out-of-state option,” said Evelyn Marchany Garcia, a top Fougera executive based in Melville. The company’s Hicksville building will be sold and 128 jobs will be transferred to Melville, where 260 people now work, said George Schwab, the executive overseeing the expansion project. Records show that workers earn, on average, $88,000 a year. “We will be moving all of our production east . . . We will elevate our operation to best in class,” he said.

Fougera was purchased by Novartis in 2012 for $1.5 billion. Begun as a retail pharmacy in Brooklyn in 1849, Fougera moved to Long Island in 1963. It makes brand-name and generic medicines used to treat psoriasis, dermatitis, acne, eczema and other skin ailments. The company is part of Long Island’s drug and biotech industry, which is a bright spot in the manufacturing sector. Most of the players are in Suffolk. This is the third time the IDA has awarded tax breaks to Fougera, according to IDA executive director Anthony J. Catapano.

Supplyhouse.com, an online distributor of plumbing and HVAC supplies, will get nearly $500,000 in tax breaks from Suffolk County to relocate its headquarters from Farmingdale to 130 Spagnoli Rd. in Melville. (Credit: Johnny Milano) Supplyhouse.com, an online distributor of plumbing and HVAC supplies, has been approved by Suffolk County for nearly $500,000 in tax breaks to relocate its headquarters from Farmingdale to Melville.

The company, founded 13 years ago out of the bedroom of president and CEO Josh Meyerowitz, plans to move 74 of its 107 Long Island employees to a facility at 130 Spagnoli Rd. and spend $820,000 to renovate and equip the property.

Supplyhouse.com, which currently operates out of a 92,850-square-foot office and warehouse space, plans to relocate its warehousing operation — 33 jobs — to a 150,000-square-foot facility in Cranbury, New Jersey, but keep and expand its corporate offices here.

The company will sign a 7-year lease for the Melville property, and has the option to purchase it for $7.1 million in year two. The company also has a warehouse in Columbus, Ohio. This is the second time in less than a year the county’s Industrial Development Agency has granted benefits for a project at the Spagnoli site. Last July, the IDA granted Hauppauge-based West Rac Contracting Corp., the property’s owner, tax benefits for a planned $2 million renovation and expansion of the 43,560- square-foot distribution facility in hopes of retaining its tenant Carr Business Systems.Carr’s lease with West Rac ends in April

Carr, a Xerox-owned distributor of copy machines, instead plans to move its more than 100- employee operation to a space at 500 Commack Rd. in Commack, the former Forest Labs property now owned by Bethpage developer Steel Equities. In 2014, Steel received IDA benefits to acquire and convert the massive site into multi-tenant office space.

Supplyhouse.com has committed to hire 20 employees over the next two years, and estimates that growth will allow it to add 50 over five years.

“We’re growing so fast that we’ve realized over time we need to leave ourselves some room for growth,” Meyerowitz said during a Thursday IDA meeting. His family has been in the plumbing business for roughly 90 years. “We’re moving our warehouse facility to New Jersey, but 80 percent of the payroll is staying in Suffolk County.”

The company plans to renovate the building to house corporate offices and meeting space as well as a training center for new employees. Job functions include accounting, purchasing, customer service, IT and marketing. Records show employees, on average, make $54,298 a year. Supplyhouse.com’s IDA benefits include a $56,494 sales tax exemption on the purchase of furniture, computers, and other office equipment; a $74,970 mortgage recording tax exemption if they opt to purchase the property; and a 10-year property tax abatement on the facility, with a 50 percent reduction on existing taxes for the first year, according to IDA documents.

Long Island’s manufacturing sector is producing something relatively new: jobs. Nassau and Suffolk counties combined added 1,300 manufacturing jobs year over year as of January to reach 71,800, increasing by 1.8 percent, according to the U.S. Department of Labor.

Durable goods manufacturing added 1,100 jobs or 2.8 percent, while nondurable goods added 200 jobs or 0.7 percent.

Kenneth Pokalsky, vice president of The Business Council of New York State, said the state’s 15,000 manufacturers employ more than 455,000 people and generate nearly $70 billion in economic output.

“Companies are hiring across the board, even in manufacturing,” Shital Patel, labor market analyst for the Long Island region at the New York State Department of Labor in Hicksville, said.

Long Island’s high cost of living doesn’t help. But local companies are finding ways to grow their business even as costs increase.

“That’s part of strategy, expanding capabilities,” Hauppaugebased GSE Dynamics CEO Anne ShybunkoMoore said of launching new products. “I went into composites 10 years ago. That opened the door for more types of work.”

Government is providing tax incentives when firms add jobs and expand. Snake Tray and Gundy Powder are getting $250,000 in property tax savings and $21,000 in mortgage recording tax savings as part of a $2.5 million expansion project.

“These are two companies specializing in technologies that are only going to grow more prevalent as time goes on,”

Islip Town Supervisor Angie Carpenter said in a written statement.

Hauppauge based A & Z Pharmaceutical plans to construct a new building and lease additional space in another building in a $3.2 million project.

The firm, which currently employs 99, expects to add 12 jobs the first year after its expansion and another 12 the following year. It will receive $742,478 in tax benefits.

Although Pennsylvania courted the firm, LIF instead will get up to $500,000 in Excelsior Jobs Program tax credits as it invests $11 million to acquire and outfit a new facility.