The CBRE|Buffalo team recently released its 2017 Buffalo MarketView reports to a lively crowd of real estate professionals, commercial real estate developers, economic developers, and municipal officials from across the region at Hotel Henry on the Richardson Olmsted Campus.
CBRE|Buffalo’s MarketView reports represent the most detailed analysis of the current state of commercial real estate in the region. The reports investigate costs, availability, absorption, construction, and other critical data that Invest Buffalo Niagara uses to inform and recruit companies to expand their operations to Buffalo Niagara.
Managing Director Shana Stegner provided welcoming remarks before introducing Mark Mortenson, the executive director of the Richardson Olmsted Campus and the Lipsey Architecture Center of Buffalo, who provided an update on Hotel Henry’s status and future. He highlighted the project as a shining example of how a historic structure can be updated and modernized while maintaining its integrity and charm.
Following the opening remarks, the CBRE|Buffalo team presented their reports on the local commercial real estate scene across four sectors.
Sarah Cashimere-Warren discussed positive trends for the local 34 million square foot office market. Although vacancy increased slightly by 0.6% bringing the total office vacancy rate to 13.1%, that figure is in-line with the national vacancy rate of 12.9%. Lease rate are steady at $16-$22/SF for Class A space and $15-$20/SF for Class B space, significantly less that the national average. Increased project construction is on the horizon, which will have a positive effect on broadening development opportunities within the Central Business District and beyond.
Robert Starzynski shared an overview of the multifamily residential market which saw $105 million in sales over 181 transactions. Of note was the 19 transactions of over $1 million. Key factors including favorable demographic trends in both the millennial and senior citizens age brackets, as well as continued low interest rates continue to be a boon to the multifamily market.
Steve Blake and Lida Eberz announced a record low industrial vacancy rate of 3.5% down 1.1% from 2016. The local vacancy rate is below that of nation (7.4%) for the 13th consecutive year. Average sale prices increased approximately 20% from last year to $32.85/SF. The local industrial market shows no signs of weakening and the duo again implored the real estate development community to engage in practices to support “just in time” delivery of industrial real estate.
Michael Clark offered positive retail market news across the region, specifically in the City of Buffalo, which is experiencing the lowest retail vacancy rate in over a decade. The regional retail vacancy rate is up 1% to 11.3%, significantly higher than the record low national vacancy rate of 7.0%. Although pressures exist from online retail operations, the positive momentum of retail real estate locally and across the nation is a sign that retail is not dead!