NORTHEAST SNAPSHOT, NOVEMBER 2004

Upstate New York Industrial Market

Although many say that manufacturing is suffering in New York state, it is still vital, especially in Upstate New York. Manufacturing jobs in the Upstate area are above the national average. Clean, cutting-edge manufacturing is one of the leaders for Upstate job creation and a great hope for the future. If you count the spin-off effects of manufacturing, those jobs account for about half of all Upstate jobs. Auto parts, computer chips and healthcare are some examples of industries finding success in the area. When high-tech is bantered about, people forget that manufacturing is where high-tech products hit the ground. The bioinformatic industry is alive and well in Upstate New York, and has financial backing from both the private and public sector.

The Buffalo-Niagara region is looking to the future in the area of bioinformatics. The partnership of private and public sector funding has produced a $290 million investment for the Center of Excellence in bioinformatics at Roswell Park Cancer Institute in the city of Buffalo. The 300,000-square-foot facility is currently under construction.

The region is in need of high bay space from 15,000 to 100,000 square feet. A number of new products are proposed or under construction to meet demand. The Broadway Development Park has plans for a total of 300,000 square feet and currently has 70,000 square feet under construction. In Lancaster, New York, East Port Business Park is being developed and will boast 1 million square feet of warehouse/distribution space. Colvin Woods, an office and industrial park in suburban Tonawanda, has 100,000 square feet under construction and the potential for a total of 330,000 square feet over the next 6 to 10 years.

Also, in the Buffalo-Niagara region, General Motors is nearing completion of its 700,000-square-foot plant expansion. The $300 million planned expansion has helped retain 600 jobs and will continue to spur economic activity in western New York. Ford plans to invest $50 million in planned development over the next 5 years that will retain and create jobs. Quebecor Printing is planning to invest $15 million to expand its operations in Cheektowaga, a suburb of Buffalo. CertainTeed Vinyl Fencing is building a new $13 million facility to house its operation near Buffalo’s Waterfront. CertainTeed will be expanding its job force and reclaiming land that previously had been designated a brownfield site.

Recent leases in the Buffalo-Niagara region include Niagara Chocolates leasing 65,000 square feet at 40 Sonwil Drive, Cheektowaga; Quality Park signing for 55,000 square feet at 2345 Walden Avenue, Cheektowaga; and SkuLogix moving into 81,000 square feet at 25 Dewberry Street, Cheektowaga.

There is considerable new activity within the city of Buffalo as well, as older properties undergo adaptive re-use. The Exchange Street area in Buffalo is reinventing itself as an industrial area with such companies as Adelphia, Colad and Graphic Controls moving in, as well as having land available for future development.

The developers in the Buffalo-Niagara region of New York are well established and control the majority of prime development areas. However, Kissling Interest LLC of New York City has acquired several properties and established a foothold in western New York. Additionally, there are several Canadian developers that are poised to move into the area. When they find a suitable situation, they will invest in flex space or large warehouses to accommodate Canadian manufacturers and warehousers. Developers and industrial parks in the region are looking to retain their current business base and entice Canadian investment to bolster the regional economy. The Canadian dollar has grown stronger in recent months and is anticipated to have a positive influence on Upstate New York as Canadian manufacturers look to establish a presence in the United States.

— Cammille L. Kantowski, Corporate Advisory Team, Industrial, Hunt Commercial Real Estate Corp.

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