Real estate is a hot topic for international companies considering a Buffalo Niagara business expansion. Businesses owners aren’t familiar with our region’s availability of commercial properties, averages sales rate or current real estate trends.
Most frequently asked questions:
- How does Buffalo Niagara compare to the national U.S. real estate market?
- How are real estate prices trending locally?
- Is there a shortage of properties which tenants and buyers are competing for?
Our partner CBRE|Buffalo, and its annual MarketView report does a great job of addressing these questions. This publication summarizes the real estate market in Buffalo Niagara – listed below are excerpts from the Annual End of Year 2015 report that international businesses owners find particularly useful:
Industrial Market
Forecasted in the 2014 CBRE/Buffalo MarketView Report, the 2015 Buffalo Industrial Market experienced a measurable decrease in the overall availability (vacancy) rate, dropping from 4.5% to 3.6%, with a substantial 2,707,651 sq. ft. of positive absorption. This is the fourth consecutive year that demand has remained strong, and has outpaced supply, resulting in lower availability rates. This trend is expected to continue in 2016 due to the lack of non-build-to-suit new construction in the pipeline.
Nationwide availability rates continued to decrease year-over-year with the national availability rate falling to 9.6% in Q3 2015. The national market has now experienced 24 consecutive quarters of availability rate decline and this rate is at its lowest since Q3 2001. For Buffalo/Erie County, 2015 marks the 11th consecutive year that the industrial market availability rate has remained below the national average.
Office Market
The Buffalo Office Market vacancy rate decreased this year to 13.5%, a 0.5% decrease from last year’s 14%. This brings Buffalo back in line with the US office vacancy of 13.4%. Nationally, downtown markets are seeing significant peaks in performance and this has also been the case in downtown Buffalo. Despite large blocks of office space in older inventory, construction and tenant active was significant with a large amount of pre-committed new space coming online.
Just under 500,000 sq. ft. of new office inventory was added this year, almost all occurring in the downtown market. The anticipation of city projects was visible through impressive demand, leaving limited amounts of vacancy as new projects were completed and space was absorbed. Some projects under construction were slowed by 2014’s harsh winter, but will come to fruition Q1 2016. New construction will be seen throughout 2016 as 350,000 sq. ft. of office inventory is currently under construction or planned.
For additional information about the Buffalo Niagara real estate market, contact Steve Blake, CCIM, Partner, CBRE|Buffalo 716-362-8707 / steve.blake@cbre-buffalo.com.