NORTHEAST SNAPSHOT, FEBRUARY 2008
Upstate New York Industrial Market
The Upstate New York industrial market continues to make gains across all major cities. One of the major economic drivers in Upstate New York has been the renewed focus on local development across each upstate city. The new initiative, led by Governor Eliot Spitzer, was launched in congruence with the appointment of Daniel Gunderson, the new chief of Empire State Development, as a renewed attempt to create new growth in upstate New York.
Upstate New York’s major developments have been primarily driven by limited new construction in the past few years for new high bay facilities that typically range from 25,000 square feet to 200,000 square feet. In Binghamton, this past November, Governor Spitzer announced the development of a vacant 33-acre industrial site that will be anchored by Control Concepts, a subsidiary of Emerson Electric. In Syracuse, two major new construction projects were completed in 2007 in the Hancock Airpark.
The first project, developed by ICM for HVAC electronic control manufacturing, is 150,000 +/- square feet while the Gaylord Brothers completed a 100,000 +/- square-foot manufacturing and distribution center. Buffalo’s largest new construction project consisted of a multi-tenanted 56,000 +/- square-foot building. However, the outlook for Buffalo in 2008 is much stronger with 50,000 +/- square feet ready to break ground and preparations for an additional 440,000 +/- square feet progressing through the design phase.
The development of new industrial space has also allowed for the conversion of older, existing industrial space, which can typically be bought or leased at a discount when compared with new construction. This was highlighted most notably in the Salina Industrial Power Park in Syracuse, where a General Motors manufacturing facility is being transformed into a multi-tenanted industrial park. The facility totals a staggering 849,000 +/- square feet and has a mix of manufacturing, distribution, wholesale warehousing and office space. Similarly, in Rochester, a 1,500,000 +/- square-foot former Kodak facility was purchased by a Buffalo area developer for multi-tenant re-development.
Areas of Improvement
While there have been several notable developments in Upstate New York, there is still high demand from potential users for warehouse and distribution buildings that range from 20,000 square feet to 100,000 square feet. In addition, while the government has taken an increasingly pro-active role in helping to encourage economic development, the lack of shovel-ready sites in some cities has been a major stumbling point. A positive sign, however, of increasing shovel-ready sites, was the recently brokered sale of 40 acres at the Port of Albany, which will be the site of a new industrial park that will take advantage of the access to the New York State Thruway.
What to Look for in 2008
An increase in industrial development and available space will continue in Upstate New York in 2008. The credit crunch that gripped most of the country in 2007 has had minimal effect on Upstate New York, which has been an encouraging factor for developers. Other encouraging factors include Upstate New York’s stable economy and easy access to the interstate highway system. In addition, Governor Spitzer’s commitment to Upstate New York continues to grow through his “City-by-City” plan, which aims to target priority projects in each major city across Upstate New York. In addition, the recent surge in the Canadian dollar over the American dollar has attracted attention from a number of Canadian companies who are in close proximity to Upstate New York. As a result of these factors, the industrial market outlook is bright for Upstate New York in the near future.
— Ian M. Bel is a sales associate, and Maureen D. Wilson, CCIM, SIOR, is the president of Pyramid Brokerage Company.
1 - http://www.ny.gov/governor/press/1016072.htm
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