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: Ricotta & Visco

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Buffalo law firm, Ricotta & Visco showed its passion for Buffalo’s central business district by spending more than $1.6M to transform a vacant, 11,440 sq. ft. building at 496 Main St. into unique office space. Ricotta & Visco took advantage of an adaptive-reuse policy from the Erie County Industrial Development Agency to help complete the renovations needed.

The company made it a priority to see that the building, dating back to the 1800s was returned to its original state. Interior designer Paul LaMorticella and David Sutton restored the building’s tin ceiling, exposed brick walls and maple hardwood floors. All of the construction on this project was completed by Lamparelli Construction.

Ricotta & Visco has since moved its offices from the Main Place Tower into the new space at 496 Main St. The firm employees 16 people and specializes in representing doctors, hospitals and health-care agencies in legal actions.

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

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

#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.

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!