NORTHEAST SNAPSHOT, NOVEMBER 2007
Upstate New York - Syracuse and Buffalo Multifamily Market
Changes have been occurring in recent years in Upstate New York. While perhaps often overshadowed by real estate activity in New York City, growth from surrounding universities, hospitals and the biotech market has allowed the Upstate New York multifamily market to thrive.
In Syracuse and Buffalo, developers are constructing projects to aid in revitalization, and to encourage the return of various businesses to the city’s CBDs; thus, increasing the need for multifamily housing. In response to the current market, developers are rehabilitating vacant commercial and warehouse buildings for multifamily and mixed-use properties. In addition, there is a definitive need for additional student housing around colleges and universities, and new student housing developments are being constructed around the SUNY schools. Developers are also constructing age-restricted buildings to target buyers that only reside Upstate for a portion of the year.
In Syracuse, developers are constructing market-rate apartments, which are attracting young professionals and empty nesters to the city. An $11.7 million, five-story market rate apartment building has been announced in the Franklin Square area with completion targeted for fall 2008. To date, 21 residential redevelopments with 214 units have been completed, and another 500 units are planned.
Following the trend of adaptive reuse, many developers are utilizing existing vacant structures for redevelopment. Armory Square, Franklin Square and Hanover Square are all areas in Syracuse with once-vacant buildings that are now multifamily and mixed-use developments, all of which are bringing more professionals back into the city.
The old adage that retail follows rooftops has come to light in Syracuse. To further encourage residential growth in the Syracuse market and to service the current population, the Pyramid Company is developing Destiny USA. A decade after the proposed retail and entertainment complex was first announced, its developer still predicts it will become a major tourist destination. Preparatory groundwork for the first phase, an 848,000-square-foot-expansion of Syracuse’s 1.5 million-square-foot Carousel Center began in April.
In addition, the expansion of the SUNY Upstate Medical University Hospital will likely draw more residents to the area with the promise of new jobs. The hospital has begun a six-story expansion of its existing building and has also announced plans for further expansion, which will include the purchase of surrounding properties to house additional medical facilities.
Buffalo is also seeing its share of residential development. The 22-story Gates Circle Condominium building, now under construction, will be the first high-rise in more than 50 years for Buffalo’s Delaware district. Proposed units for the $55 million project’s penthouse homes range from $400,000 to more than $2 million. The condominium is expected to increase the district’s residential population. To encourage developers to construct more affordable housing components in their mixed-use projects, city officials are offering New Market Tax Credits, further facilitating the revitalization of downtown Buffalo and encouraging the influx of young professionals and empty-nesters.
The redevelopment of existing structures in Upstate New York is expected to continue as developers discover more hidden gems within Upstate’s markets.
— John F. Cook is vice president at Red Capital Group in Camillus, New York, and Lee F. McNeer is vice president at RED CAPITAL GROUP in Columbus, Ohio.
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