Articles

Expected market correction puts pressure on government leaders “to do no harm”

By Bob Richardson, president, NAIOP Upstate New York Chapter

There was no drama on this Election Day as mayors in Rochester and Buffalo won easy re-election.

As incumbents Lovely Warren (D-Rochester) and Byron Brown (D-Buffalo) prepare for another term in office, they need to be planning to make sure the economies in each city are on sound footing.

It will not be an easy task.

The consensus nationally among the commercial real estate community is that a market correction is fast approaching.  For example, under the direction of the Federal Reserve, banks are beginning to reduce the amount of capital they will lend on projects and some projects are already at risk for lack of financing.  As “under-banked” markets, Rochester and Buffalo are at an even greater risk.

William Dudley, president of the Federal Reserve Bank of New York, said job growth is running at about half the national pace in the central and western regions of New York.  Manufacturing jobs are decreasing and the regions are having a difficult time keeping pace with the forces of technology and globalization.

“The good news is that the region is growing,” Dudley told the Rochester Democrat & Chronicle.  “The bad news is the growth is not as strong as the country as a whole.  Some of the areas have some comparative advantages that they’re able to build on – photonics here in Rochester is a good example.  But there are more difficult problems that need to be addressed. Especially in Rochester, it’s the unequal access to the economy.”

Buffalo’s job market is faring no better.  In September, the region lost 3,500 jobs from the previous year; according to the New York State Department of Labor, it was the worst monthly job loss in 7 1/2 years.

The Federal Reserve issued a report that noted a slowdown in job growth across upstate New York.

“The slowdown has been driven by steep declines in the region’s manufacturing, retail and business services sectors,” the report said. “In addition, job growth in Buffalo during the expansion had been buoyed by a surge in construction jobs associated with major projects such as SolarCity and the Buffalo Niagara Medical campus.  As these projects have wound down, so too has construction-related employment.”

I believe that these factors are the leading indicators that Buffalo and Rochester may experience a real estate correction like we have not seen in recent cycles.  Because these two cities did not go up when others did, they did not go back down when other cities did.  That’s different now and we are much more likely to face downward pressures on the same cycle as other cities.

Mayors Warren and Brown, and government leaders throughout the region, need to be ready for the coming market correction.  “Do no harm” may be part of the Hippocratic Oath, but it applies here, and should be their mantra. 

Massive infusions of state cash to localities are likely a thing of the past.  Leaders need to make sure that legislation does not impede development.  Buffalo is a good example, where the city is considering new inclusionary zoning legislation which would put a significant burden on commercial real estate projects.

If the wrong policies are put in place, at a time of natural market retrenchment, the results could be very detrimental to individuals seeking housing options as well as the entire economic development and job creation environment.

We wish newly-elected government officials the very best as they guide their municipalities during the challenges that await them.  NAIOP stands ready to assist city planners in making sure that any development policies are fair, effective and productive, leading to positive results.

Development projects to be honored by NAIOP

NAIOP Upstate New York, The Commercial Real Estate Association, will present its 2017 awards in commercial real estate, showcasing the finest development projects throughout Upstate New York, Tuesday, Nov. 28, 5:30 p.m., at the Hotel Henry Urban Resort Conference Center in Buffalo.

Categories include mixed use, adaptive reuse, industrial, office, medical, urban multi-family, retail, and residential.  Awards will be based upon how the nominated project differentiates itself from other projects, based on creativity, uniqueness of design, sustainability, and economic and community impact.

Sponsorship opportunities and tickets are still available please contact Joe Stabb at 315-886-9544 or via email Membership@naiopupstateny.com

NAIOP Upstate New York honors commercial real estate developers

NAIOP Upstate New York (The Commercial Real Estate Association) handed out its prestigious 2017 Annual Awards in Commercial Real Estate, during ceremonies Tuesday, Nov. 28, at the Hotel Henry Urban Resort Conference Center in Buffalo.

“The awards showcase the finest development projects throughout Upstate New York,” said Bob Richardson, NAIOP Upstate New York president.  “These developers are making a significant impact in their communities as they creatively develop properties that are touching every facet of their locales.”

Projects were completed between Oct. 1, 2016, and Sept. 30, 2017. Categories include Mixed Use, Adaptive ReUse, Industrial, Office, Medical, Urban Multi-Family, Retail, and Residential.

The honorees:

Carlson Park Business Center                                
Adaptive ReUse Award of Excellence                    

Carlson Park Business Center is an 800,000-square foot industrial building on approximately 39 acres of land on the East side of Rochester.  The building was developed by Stromberg-Carlson beginning in the early 1920s. Today, tenants Radio Social and Comedy at the Carlson are booming. Weekdays it is filled with children being dropped off for dance class, employees for the offices and manufacturing, or the 60 plus entrepreneurs that now call Carlson Cowork “home.” Carlson has been transformed from being a single-use building in the 1920s and then housing a couple of large tenants in the past to now housing numerous smaller tenants ranging from 2,750 square feet to about 200,000-square feet and providing more financial stability. 

The Metropolitan                        
Mixed Use Exceptional Recognition                      

Gallina Development’s The Metropolitan in Downtown Rochester has undergone major renovations. The 26?story tower has become a mixed?use project consisting of commercial, residential and retail.  Completed in 1973 as Lincoln First Tower and later rebranded as Chase Tower, The Metropolitan is a true piece of Rochester history. Standing as one of the city’s tallest skyscrapers, the building is distinguished by its “white fins” and outward curves at the base.

Charlotte Square Apartments     
Urban Multi-Family Award of Excellence 

Home Leasing LLC developed this luxurious, modern design in the heart of the East End district. 72 spacious apartments have private terraces or balconies. Amenities include two outdoor gathering spaces with fire pits, grilling spaces and a television. Indoors, the community room has a kitchen, media center and fireplace.

Bevier Memorial                          
Historic Restoration Award of Excellence            

The Bevier Building at 42 South Washington St., is the latest in the transformation of historic buildings in downtown Rochester into loft apartments. Designed by Claude Bragdon and initially completed in 1910, the building was home to Rochester Athenaeum and Mechanics Institute's School of Art and Design, the predecessor to Rochester Institute of Technology. Rochester developer Patrick Dutton worked with Franklin Properties of Syracuse to transform the once-vacant building, which is located near the Rochester City School District building downtown.

The developers embarked on a $4 million facelift, creating a mixed-used development that now includes 15 residential apartments and 5,000-square-foot of commercial space. Some of the amenities at the Bevier Building include off street parking for commercial and residential tenants, bike storage and a community garden.

St. John Fisher Chapel                  
Educational Award of Excellence  

Labella Associates work on The Hermance Family Chapel of St. Basil the Great is the realization of the campus vision to provide a chapel that exemplifies the cornerstone of the St. John Fisher mission. The 8,000-square foot program provides a flexible worship and gathering space while blending with the Campus vernacular and iconic context.  

del Lago Casino                              
Place Making Award of Distinction  

The Wilmot Family and its Rochester-based leading commercial real estate development and management company, Wilmorite Inc., had been trying to open a casino in New York state for more than 15 years. del Lago Resort & Casino is a partnership between Wilmorite Inc. and Peninsula Pacific. Creating 1,300 permanent jobs has made del Lago the largest employer in Seneca County.

301 Ohio                                         
Mixed Use Award of Distinction   

Ellicott Development’s five?story, 50,000 square feet mixed?use building with retail, office spaces and 21 one and two?bedroom apartment units providing vitality that will draw people to the long?neglected river’s edge. The building’s massing is designed to complement the historic concrete structures across the Buffalo River.

Buffalo River Landing                
Urban Multi-Family Award of Excellence   

Savarino Companies developed the five?story, 93,000 square foot building features secured ground floor parking for 67 vehicles, and 64 one bedroom and 14 two-bedroom units. The building exterior references the rich heritage of the site with unique textures and colors that evoke the industrial character of the surrounding context.

Sodexo Regional Service Center 
Office Award of Excellence    

Uniland Development Company, the leading developer of commercial real estate in the Buffalo?Rochester corridor, constructed a 109,000?square?foot regional service center for Sodexo, Inc., to provide consolidated operations at its Airborne Business Park in Cheektowaga, and retain 511 jobs.

57 Canal                                          
Historic Restoration Award of Excellence    

Iskalo Development’s fully-restored building at 57 Canal Street represents one of the jewels in the crown that is the Canal Street historic district in the City of Lockport. The project is a result of a successful public-private partnership between Iskalo Development and the City of Lockport, and is representative of the rich history of the City and the possibilities that exist. 

Reikart House                                
Hospitality Exceptional Recognition    

Iskalo Development’s boutique hotel features 92 elegant guest rooms stylized in classic themes, with a touch of whimsy. Designed to feel more like bedrooms than hotel rooms, guest rooms at Reikart House feature custom-designed, one-of-a-kind finishes and furnishings.