43North Semifinalists Are All Winners At Bright Buffalo Meetup

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by Jenna Kavanaugh, BNE Marketing & Communications Director

I’ve been pleased to be part of the 43North team throughout the process of attracting entrepreneurs to compete for an unprecedented $5 million in funding. 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

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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.

Mapping Downtown Buffalo’s Development

by Christopher Finn, Research Manager

In the years ahead, 2014 will be viewed as a milestone in Buffalo’s history.

-The year that development plans and proposals turned to cranes and steel.

-The year that saw the commencement or continued construction of projects that altered the future of the western New York region.Buffalo, NY Development on the Rise!

These projects were not achieved by happenstance, but through decades of hard work and persistence from local stakeholders, built from the foundation of other significant development ventures that came before.

From Buffalo Billion Initiatives, (eg – High Tech Park @ Riverbend and IBM’s announcement) to HARBORcenter; from the University at Buffalo’s Medical School to Canalside, Buffalo’s development is occurring organically and with great diversity.

Our future is now and it’s the culmination of a development strategy rooted in unprecedented cooperation between public and private entities, community organizations and every level of government.

In an effort to chronicle this momentum, Buffalo Niagara Enterprise has updated our downtown developments maps. We consider this an ongoing effort, with updates occurring regularly, so input is always welcome. Please do not hesitate to contact me directly with observations, additions, or edits.

STATUS, Downtown Buffalo Development Projects (Completed, Under Construction and Proposed)

TYPE, Downtown Buffalo Development Projects (Medical/Medical R&D, Mixed Use, Office, Other, Residential and Tourism/Hospitality)

START-UP NY Tax Free Zones Program Launches (Blog II)

With the New Year upon us, New York State’s most exciting tax incentive program in recent memory has officially begun. On January 1, 2014, START-UP NY went into effect, allowing companies to partner with colleges and universities to create partnerships that allow these businesses, and their owners and employees, to operate completely tax free for a ten-year period.

Many have heard something about the program, but may have many questions about which businesses are eligible, what an affiliation with a college or university must look like, how to apply, and more. I wrote an earlier blog outlining the basics of the program. Now, I’ll do my best to offer some clarity to the process a company can anticipate should it seek to take advantage of this exciting new program.

An eligible company should start by thinking about which college or university with which it would like to affiliate. For some companies, this might be a simple process, but for many others, they may have never considered partnering with an academic institution. Well, in order to participate in the program, each school must submit and publish a plan that outlines the specific industries it is targeting for this program. Here in Buffalo Niagara, I am working with each participating institution and am familiar with their respective plans, so I can be a resource during this process.  Empire State Development (ESD) is also here to help.

Once a company and an academic institution are matched up, the two will enter into negotiations on four key points:

  1. Space and lease rates – each institution will designate specific buildings and/or land on its campus(es) that are available for lease. Additionally, each institution may designate up to 200,000 square feet of space off campus, based on the company’s needs.
  2. Affiliation – the two parties will determine exactly how they will interact, or affiliate, a key to eligibility for the program. In this point, both parties will seek a mutually beneficial arrangement.
  3. Job creation commitment – the company must commit to creating net new jobs (to New York State) in order to participate in the program, and will negotiate this number with the institution.
  4. Intellectual property (IP) – the two parties must agree upon who will own IP should any patentable discoveries take place during the course of the affiliation.

Once the two parties have agreed on the above four items, this will represent a completed application. The application will then go to Empire State Development for final review. This review period is set to last 60 days, at which point if an application has not been rejected, it is formally approved. Once approved, the application becomes a legally binding contract between the company and the academic institution and the company and its employees can start reaping the benefits of operating free of New York State taxes for the following ten years!

Still have questions? That’s not surprising. It’s impossible to sum all this up in one short blog. But please feel free to email me at any time for more information, especially if you’re a company considering taking advantage of this exciting new opportunity! arosenhoch@buffaloniagara.org.

Are You Right for Buffalo? Thank you!

So many people were generous with their locations and time in the making of Are You Right for Buffalo? Thank you for your help promoting Buffalo:

John Paget and fabulous crew of Paget Films, Block Club, Larkin Square, Buffalo Harbor Kayak, WNYBAC, Sun Restaurant, Healthy Zone Rink, Anchor Bar, Lexington Co-op, Liberty Hound, Canalside, Tabree, Bistro Europa, Megan Norris, Erin Habes, Bonnie Jean Taylor (wonderful host), Seamus (the wingman), and Chuck and Bill Banas the “twins”…Thanks so much to all!