15 Winning Years for Western New York

To view BNE's most recent results, check out our 2013/14 Annual Report

To view BNE’s most recent results, check out our 2013/14 Annual Report

Since our inception in 1999, BNE has worked to attract more than $3.5 billion in new business investment to the region.  That figure accounts for 319 projects, with an impact of nearly 41,000 jobs either pledged or retained.

Here are some highlights:

Alpina was started in 1945 in Sopo, Colombia and produces more than 500 consumer products including baby foods, juices, cheeses, smoothies, and yogurts.  In March 2011, Alpina announced its first U.S. manufacturing facility focusing on Greek yogurt products.  Alpina USA now has 83 full-time employees making a variety of products in their brand new $16M facility located in the Agribusiness Park in Batavia, NY.

Fichman Furniture, founded in Scarborough, Ontario, manufactures custom wooden radiator covers.  In June 2012 they purchased their first U.S. industrial building in Holland, NY and pledged to create 15 new jobs over five years while investing $3M into the new facility.  After only two years, the company employs five full-time workers and has seen sales exceed expectations thanks to its U.S. location.

GEICO opened a WNY office on March 8, 2004 with just 75 employees and a long-term goal of having as many as 2,500 associates within 15-20 years. GEICO eclipsed 2,500 associates in June 2013 and, a decade after opening, the office is now home to more than 2,700 associates with plans to add another 700 employees this year.

Greenpac Mill is a partnership between Cascades Inc. and three other partners.  In June 2011, the company pledged to create 108 jobs and invest $400M in a new facility.  They built a state-of-the-art containerboard mill in Niagara Falls, manufacturing lightweight linerboard from 100% recycled fibers.  Today, the company employs 130 full-time employees with two shifts on a four-shift rotation.

Nutrablend Foods is a Canadian based company and the leading manufacturer in the sports nutrition and nutraceutical industries.  Headquartered in Cambridge, ON, in October 2009 they located to their first U.S. manufacturing facility in Lancaster, NY.  Pledging to create 40 new jobs in the first five years and invest $1M into building and equipment, they now have 134 employees running two shifts daily.

Muller Quaker Dairy, formed in 2012, is a joint venture between PepsiCo and the Theo Muller Group.  The company opened a state-of-the-art yogurt manufacturing facility on 82 acres in Batavia.  Pledging to create 186 new jobs and invest $206M into the facility and operations, they currently employee 172 full-time employees and make three yogurt varieties.  Muller Quaker Dairy was recently named Northeastern Economic Developers Association’s (NEDA) project of the year.

US Off-Track is a licensed account wagering service provider and management company serving the thoroughbred, harness and greyhound racing industries.  With a corporate office in Florida and call centers in Portland, OR, and Amherst, NY, the company announced a new Amherst location in October 2011. Pledging to create 80 jobs and invest $750,000 into the new facility, just three years later they employ 63 people and operate six days a week.

Welded Tube, headquartered in Concord, ON, announced their newest U.S. location to be built in Lackawanna, NY in October 2012.  Welded Tube USA is a leading manufacturer of cold-formed tubing products that are distributed throughout North America.  The company pledged to create 121 new jobs and invest $48,250,000 in their new facility.  After only two years, they employ 60 full-time workers at the former brownfield site.

Yahoo! announced plans for their Lockport, NY data and internal operations center in 2009.  Phase 1 was completed in March 2011 with the opening of a 190,000 sq. ft. facility employing 90 technicians and engineers.  Announced in 2013, Yahoo’s Phase 2 expansion is underway and includes an additional 236,000 square feet of data center and 35,000 square feet of administrative space that will house 115 employees for Yahoo’s Customer Experience Center.

If We Build It, Will Retail Come?

 

Canalside, Buffalo, NY

Canalside, Buffalo, NY

Planners and politicians agree that a vibrant downtown is a measure of a region’s success and retail activity is a critical component. While Buffalo’s central business district is in a period of rebirth, many wonder if increased retail activity will follow. Progress in other markets illustrates that a sustainable trajectory of increasing demand will appeal to retailers. This sustainability is built on common principles: increase downtown population, develop a mix of complimentary uses, attract tourists, and improve accessibility.

Housing is a primary catalyst for downtown development and a priority for local government. The 9-5 workforce cannot sustain retail and commercial activity but a significant residential population creates the necessary balance. Mayor Byron Brown is committed to residential development with his administration’s stated goal of 1,300 new downtown housing units by 2018, leveraging the recommendations of the Buffalo Building Reuse Plan (BBRP) to achieve this effort.

Building these units alone won’t create demand. Residents will be attracted to a downtown with a variety of recreational, professional, and commercial development. BNE’s downtown development map highlights the diversity of current and proposed projects.

In addition to workers and residents, a vibrant downtown will attract tourists. Complementing the existing cultural amenities, HARBORcenter, Canalside and its future attractions such as Explore & More Children’s museum will draw millions of visitors to downtown Buffalo. To meet the demand of this development, hundreds of new hotel rooms are in the works.

Lastly, a successful downtown must be accessible. As the Cars Sharing Main St. project creeps towards Canalside, a Pearl St. reconfiguration is planned and streetscape improvements are developing for primary thoroughfares such as Ellicott, Genesee, and Chippewa Streets. Buffalo’s downtown accessibility will be markedly improved.

There is no guarantee of retail progress yet, but a sign of its imminent arrival is the arrival of at least 15 new downtown restaurants recently opened or in development.

While other components such as the regulatory environment, public safety, and surrounding neighborhoods all play a vital role in the downtown equation there isn’t enough space in this post to elaborate! However, rooted in these principles, with increased retail development on the horizon, Buffalo’s downtown future will leave visitors impressed and residents proud.

by Christopher Finn, Research Manager

When it Comes to High Tech, Buffalo Manufacturing Works

While not the flashiest of Governor Cuomo’s Buffalo Billion initiatives, Buffalo Manufacturing Works has the potential to be one of the most effectual of them all. Originally dubbed the Buffalo Niagara Advanced Manufacturing Institute, Buffalo Manufacturing Works will soon become a pillar of the region’s manufacturing sector, providing technology solutions to companies across the industry through world-class engineering support, research and design, training and strategic services. Over the next five years, $45 million will be invested in facilities, equipment and engineering staff creating a state-of-the-art institution for the benefit of WNY manufacturers.

Perhaps my favorite aspect of Buffalo Manufacturing Works is that it creates a major new asset for existing WNY manufacturers while simultaneously creating an incentive for BNE to market to potential attraction targets. In an era where companies across the board are cutting back on research and development budget lines, the opportunity to leverage this great asset will be a significant draw for growing manufacturing firms. Few other locations provide companies with such an advantage.

Resulting from several in-depth focus groups and research, three primary technology areas will dominate Buffalo Manufacturing Works: flexible automation, materials and testing, and processing and fabrication. Columbus, Ohio-based EWI, North America’s leading engineering and technology organization, will operate the institute. The member-driven not-for-profit was selected to operate the Buffalo initiative based on its 30 years of success in central Ohio. Three additional key local partners are involved: the University at Buffalo providing access to early-stage fundamental research and academic facilities; Insyte Consulting assisting with improvements to process and operational productivity; and the World Trade Center Buffalo Niagara helping companies identify new markets and export opportunities.

As manufacturing shifts ever more towards highly technical and advanced practices, this investment will prove integral in continuing the Buffalo Niagara region’s great legacy as a nucleus of manufacturing innovation.

Click here to read more Buffalo Manufacturing Works from the Buffalo News.

by Alan Rosenhoch, Business Development Manager

Fantasy Football? Bet on Buffalo Niagara this Year!

In Buffalo Niagara, the falling leaves mark another Bills’ season and endless debates about what’s in store for our beloved team. NFL analysts and prognosticators predict each team’s playoff future but this year, Team BNE is taking a slightly different approach to forecast the Bills’ win-loss potential.  Instead of rankings and depth charts, we matched up each game on a stat that we regularly report, cost-of-living.

When we work to attract a company to our region, the Buffalo Niagara’s cost-of-living comes up frequently.  This statistic puts salary into context and illustrates how far a dollar goes here versus other areas. Aggregated by the Council for Community and Economic Research, every quarter Team BNE hits the field to price out a typical “basket of goods” which ranges from food staples to home prices and doctor visits to dry cleaning services. The data from Q2, 2014 shows we have a score of 97.2, which means our cost-of-living score is 2.8% below the national average. Using this data, we matched up the Buffalo market versus the Bills’ 2014 – 2015 opponents. (The Green Bay game was recorded as a tie with no data for their market.) Let the competition begin!

Cost of Living Comparison

Cost of Living Comparison

If our cost of living score is any kind of indication, using our complicated prediction model, the analysis shows the Bills will have an easy run into the playoffs with a final record of 14-1-1!

(Sigh….) If only this figure was taken into account for the actual season!  But you can bet Team BNE is looking for a season of economic wins and when it comes to our beloved Bills, the playoffs will be more than a fantasy!

https://www.youtube.com/watch?v=PHbnQXsyDrE

by Christopher Finn, Research Manager

43North Semifinalists Are All Winners At Bright Buffalo Meetup

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by Jenna Kavanaugh, BNE Marketing & Communications Director

In May 2013, the New York Power Authority (NYPA) trustees approved $5.4 million in funding for the 43North global business idea competition. The award came from a recommendation by the WNY Power Proceeds Allocation Board (WNYPPAB) to attract entrepreneurs to compete for an unprecedented $5 million in prizes.

I’ve been pleased to be part of the 43North team throughout the process. It’s crunch time as we head into the finals having scoured thousands of ideas submitted from February through May. Judges have narrowed it down to 113 semi-finalists, and at the end of September eleven finalists will be announced to advance to the final round of the competition.

As part of the excitement and anticipation such a competition presents, Buffalo will host “43North Week” from October 24th through October 30th, with a series of events and educational opportunities.  This includes everything from a startup pitch competition, to a coding workshop, to an evening of networking in the eclectic cafes, clubs, galleries and music venues of Allentown.

One of the week’s most anticipated events is the Bright Buffalo Niagara Semifinalists Meet up, on October 29th.  All 113 semifinalist companies are given the opportunity to meet and mingle with venture capitalists and angel investors and learn more about local resources that promote investment, business partnering and other startup services.  It will be held at the University at Buffalo Clinical Translational Research Center spotlighting life sciences innovation and technology based economic development in the heart of the Buffalo Niagara Medical Campus.

The big finale takes place on Thursday, October 30th, when the eleven finalists will pitch their ideas to a panel of judges in front of a live audience at Shea’s Performing Arts Center.  One business will be awarded $1 million, six will receive $500,000 and four will receive $250,000.  The public is invited to attend the awards celebration that evening to experience first-hand the excitement generated by the competition.  It will be an unforgettable evening, I’m sure. For more information about 43North or registering for the reception, please visit www.43North.org.

Canadian Businesses Consider Real Estate in Buffalo Niagara

By Steve Blake, Partner at CBRE Buffalo

Real estate availability and cost is an important topic for Canadians considering a business expansion.  The real estate markets in Toronto and Buffalo Niagara differ greatly and as the US economy continues to change, it leaves business owners uncertain.  Companies are unsure of the availability of commercial properties, average lease rates, and the current trends specific to the Buffalo Niagara region.  And how does Buffalo Niagara compare to the US real estate market?  Have the prices plummeted?  Is there a glut of properties just waiting for tenants and buyers?

CBRE|Buffalo publishes a MarketView report every year summarizing the real estate market in Buffalo Niagara.  Here are some excerpts from the Annual 2013 report:

Industrial Market

As forecasted in 2012 by CBRE|Buffalo, the 2013 Buffalo Industrial Market did experience a sizeable decrease in the overall vacancy rate, decreasing from 9.2% to 5.7%.  This equates to 2,482,446 sq. ft. being absorbed in the greater Buffalo MSA.  Nationally, demand for industrial space continued to improve with the national overall vacancy rate decreasing 13.1% to 11.7% in the third quarter 2013. (CBRE, INC U.S. Industrial Market View Q3 2013).  The 2013 results mark the 8th consecutive year the Buffalo Industrial Market vacancy rate has remained below the national average.

Industrial RE Chart
* The arrows are trend indicators over the specified time period and do not represent a positive or negative value.

(e.g., absorption could be negative, but still represent a positive trend over a specified period.)

Office Market

The overall Buffalo office market vacancy increased to 13.71%, up from the previous year’s 10.37%. The expected increase comes after HSBC’s downsizing, which resulted in its departure from One Seneca Tower (formerly One HSBC Center) leaving more than 700,000 Sq. ft. vacant in Buffalo’s Central Business District (CBD). Despite the increase in vacancy, the submarkets displayed positive net absorption of 163,137 sq. ft. of office space, offsetting the spike. As in previous years, the Buffalo market continues to fall below the national office vacancy of 15.1% reflecting a relatively stable market. (CBRE, Inc. U.S. Office MarketView Q3 2013)

Regardless of the cautious sentiment surrounded by the increase in CBD vacancy, construction is thriving with many new office projects downtown and throughout the suburban markets. The Buffalo office market added over 873,000 sq. ft. of office inventory.

Office RE Chart

* The arrows are trend indicators over the specified time period and do not represent a positive or negative value.

(e.g., absorption could be negative, but still represent a positive trend over a specified period.)

 

Additional questions that Canadian companies commonly ask:

Q: Can we reduce our ‘real estate costs’ by expanding into a less costly market, without jeopardizing our profits or business model? 

A: For many companies it is a resounding YES.

Some simple observations:

Average cost to purchase industrial real estate:

  • Toronto GTA (Greater Toronto Area) :   $81.92 psf. *
  • Buffalo/ Erie County:   $26.61 psf. ** = savings of approx.   68% per square foot.

Average additional rent charges for real estate taxes, common area maintenance and insurance, industrial leases:

  • Toronto GTA:                     $3.10 psf *
  • Buffalo/Erie County:       $1.76 psf ** = savings of approx. 43% per square foot.

Cost to purchase fully serviced industrial land:

  • Toronto GTA: approximately $275,000 per acre to $400,000 per acre
  • Buffalo/Erie County: approximately 45,000 per acre to $60,000 per acre = savings of approx. 84% per acre.

NOTE: Similar percentage savings also apply to the office market.

Q: Can we potentially reduce not just our real estate costs but our ‘overall occupancy costs’ including but not limited to utility costs, real estate taxes, sales taxes, employee wages and costs, through available economic incentive programs?

A:  Ontario/Toronto – no.

New York/Buffalo – yes.

In United States and specifically in the Buffalo Niagara Region companies of all different sizes can apply and potential qualify for incentives programs to assist with utility costs, real estate taxes, sales taxes, employee wages and costs.  Most of these programs’ main criteria are based on the number of new jobs being created, the projects’ costs and plans, and the specific industry the company operates in.  Companies need to complete an application process and potentially compete for some of these programs.

There are significant differences between the real estate markets in Buffalo Niagara and the Toronto GTA.  Furthermore, the Buffalo Niagara real estate market has fared relatively well over the past year, even in tumultuous times across the country.  While these statistics and figures provide some great information, they are no substitute for feet-on-the-ground.  So why not head south to see what opportunities the Buffalo Niagara real estate market may hold for your company?

 

CBRE|Buffalo, an affiliate office of CBRE, Inc., staffs 16 professionals and offers a full range of commercial real estate services to Erie, Niagara, Chautauqua, Cattaraugus, Wyoming and Allegany counties, and portions of Orleans and Genesee counties. Our industry-leading platform provides unparalleled service to meet any client requirements including: landlord/owner representation, tenant/buyer representation, property and project management, investment sales, consulting, and marketing and research services

For additional information contact Steve Blake, CCIM, Partner at 716-362-8707 or steve.blake@cbre.com

*     Source: DTZ Barnicke Q1 2012 Industrial Market Report

 **   Source:  CBRE Buffalo

New York’s High Tech Corridor

Click here for Academic & Industry Asset Maps

Click here for Academic & Industry Asset Maps

By Tony Kurdziel, Business Development Manager

In November 2013, New York Governor Andrew Cuomo announced the creation of a clean-energy research campus on 90 acres of land along the Buffalo River calling this initiative the Buffalo High-Tech Manufacturing Innovation Hub @ RiverBend. At the same announcement, SORAA and Silevo were named as the first two tenants. Recently, SolarCity announced plans to get into domestic gigawatt-scale PV cell and module production (via acquisition of Silevo) that would further transform Riverbend.

Why New York? Partially because we have invested in developing properties such as Riverbend and the 1,250 acre development site , WNY STAMP. But more moreover, we are home a number of important assets that support a high-tech corridor, including:

  • Existing Fabs –IBM, Global Foundaries and multiple development sites created with the semicon industry in mind – STAMP, Marcy, Luther Forest
  • Top semiconductor industry suppliers like ASML, AMAT, TEL, Praxair, Edwards Vacuum
  • Rare infrastructure, especially low-cost, highly reliable hydropower and affordable, plentiful  process water
  • Deep connectivity with regional universities that support R&D and workforce needs
  • Six AAU universities across the New York state
  • Public-private partnerships, with more than $20 billion invested across New York by major players in the industry
  • Federal and state representatives that strongly support the semiconductor industry

If you are attending Semicon West, July 8-10 in San Francisco, CA, stop by booth #2411. The New York Loves Nanotechnology team will be there to discuss the region’s resources and advantages.

 

Buffalo Niagara Commercial Real Estate: Good Challenges, Great Opportunities

by Tom Kucharski, BNE President & CEO

Buffalo Niagara has had one of the country’s most affordable commercial markets since the 1980s, when manufacturing decline, sprawl and economic uncertainty depressed the area’s real estate values. Now, however, as the local economy’s gained a level of momentum not seen in 60 years, what’s the impact on commercial real estate?

From 2012 to 2013 Buffalo Industrial Market experienced a sizable decrease in the overall vacancy rate, decreasing from 9.2% to 5.7%. The 2013 results mark the eighth consecutive year the Buffalo Industrial Market vacancy rate has remained below the national average, currently 11.7%. (CBRE, Inc. U.S. Industrial MarketView Q3 2013).

The region’s growth and expansion has caused a decrease in vacancy rates, driving factors behind new medical and office developments from the south campus of the University at Buffalo through the Buffalo Niagara Medical Campus. And brownfields between Buffalo and Lackawanna, as well as several northward through Niagara Falls, are bursting to life with facilities to support advanced manufacturing and future-looking technologies. Local development is currently estimated at approximately 700,000 sq. ft. of new construction planned for the first and second quarter of 2014.

Offices are filled with employees, of course, and we’re also seeing subsequent demand for residential properties, particularly mid- and high-end rentals. More people means a need for more service-oriented businesses, too, like coffee shops, restaurants and grocers – providing opportunities for small business entrepreneurs and a need for refurbished, ground-level spaces. Residential and commercial vibrancy also creates a more robust destination for tourism and recreation, and cranes are high in the sky with ongoing work at Canalside and the hockey-centric HarborCenter development.

This low vacancy rate may also be an opportunity for developers. Steve Blake, a partner in CBRE Buffalo expects the 3rd quarter/2013 vacancy of 5.7% to tighten even further by the end of 2014. Blake recently commented that, “This will inevitably result in higher lease rates and require longer lease terms as tenants turn to developers for new product to  meet their demands. While the Buffalo industrial market rarely has ‘true’ speculative development occurring, with market conditions there is a good probability that by simply publicly announcing a proposed, high bay, distribution warehouse project, a developer will have a good chance of pre-leasing a major portion of that project”.

Overall, while the market is stronger than it has been in decades, strategic reuse of existing buildings coupled with targeted new development means that commercial properties in Buffalo Niagara will continue to be attractively priced while still reflecting the region’s economic and cultural resurgence. And with potential support through “Buffalo Billion” allocation and the STARTUP NY Tax-Free Zone program, there’s unprecedented financial support for Buffalo Niagara business development.

Comprehensive sector overviews and up-to-date listings of new construction and redeveloped properties, available brownfields, and shovel-ready sites can be found in the Real Estate section of the BNE website. Our team also offers a range of services including assistance with financing and incentives to help new, relocating and expanding businesses take advantage of one of the country’s most affordable and dynamic commercial real estate markets.

 

 

 

 

 

 

 

 

 

#NewBFLO Developments: the Hub

NewBFLO-04_07_14-HUB (4)

Work is underway at 145 and 149 Swan Street as the two buildings are rehabilitated. Dubbed the Apartments at the HUB, the two historic buildings will house 50 new apartments and first floor retail in original storefront space. This will all be done with a bicycle them, hence the name “the HUB”. The buildings are being developed by architect/developer Jake Schneider and his team at Schneider Design. The $13.5 million project is utilizing historic tax credits with historic review and approval services provided by Preservation Studios.

First Floor Retail:

Three bicycle-related commercial tenants will have storefronts at the Hub and a bicycle sculpture will be featured on on the corner of Michigan and Swan along with ample bike racks. Commercial tenants will include:

  • A fitness center dedicated to cyclists
  • A Pub called the Handle Bar at the Hub
  •  The Bike Shop, an expansion outlet of the Bike Shop located in East Aurora

Go to Mapping Downtown Buffalo’s Development for more information on developments in Buffalo, NY.

Watch for #NewBFLO on our Blog, Facebook, and Twitter.