When working with Canadian companies considering a Buffalo Niagara business expansion, availability, costs, and market conditions are always the primary concerns. Canadian business owners are unsure of the availability of commercial properties, average sale rates, and the current trends relating to Buffalo Niagara real estate.
Some of our most frequently asked questions:
- How does Buffalo Niagara compare to the national U.S. real estate market?
- How are real estate prices and landlord incentives trending locally?
- Is there a shortage of properties which tenants and buyers are competing for?
To help address these concerns we refer to our partner CBRE|Buffalo, and its annual MarketView report. This helpful publication summarizes the real estate market in Buffalo Niagara. Listed are some excerpts from the Annual EOY 2016 report that Canadian businesses owners find particularly useful:
Industrial Market
The U.S. and Buffalo Industrial Markets have had a great run in recent years; however, the 2016 Buffalo Industrial Market did experience a slight increase in the overall availability rate, increasing from 3.6% (historic low) to 4.6%. This local shift in absorption is contrary to national trends, but the 4.6% still represents a very low availability rate.
Nationwide availability rates continued to decrease year-over-year with the national availability rate falling from 9.6% to 8.2% in Q4 2016. 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, 2016 marks the 12th consecutive year that the industrial market availability rate has remained below the national average.
|
Quick Stats |
Current Year |
Change from last year |
|
Vacancy |
4.6% |
Up |
|
Net Absorption |
1,444,985 sq. ft. |
Down |
|
Construction |
197,000 sq. ft. |
Down |
* The changes from last year are trend indicators over the specified time period and do not represent a positive or negative value. (e.g., absorption could be negative, but still represent a positive trend over a specified period.)
Office Market
The Buffalo office market vacancy rate continued to decline to 12.5%, a 1.0% decrease from last year’s 13.5%. In contrast to last year, the market is outperforming the National Office Vacancy of 13%. Downtown continues to be a bright spot with strong activity and interest by tenants, while the suburban submarkets were generally flat. Over 300,000 sq. ft. in completions were added to the office inventory with 257,824 sq. ft. projected. Projected construction has slowed leading into 2017, but projects have been announced and will enter the pipeline in coming years.
An increase in activity was experienced throughout the 2nd half of 2016. High density office tenants seeking efficient layouts and parking remain drawn to the suburban options. The back-office industry continues to thrive in Western New York and has become a critical element in the overall stability of the suburban office market. The healthcare industry remains a major driver in medical office building construction nationally and the same is true for Buffalo.
|
Quick Stats |
Current Year |
Change from last year |
|
Vacancy |
12.5% |
Down |
|
Class A Lease Rates |
$19-26 |
~same |
|
Class B Lease Rates |
$15-20 |
~same |
* The changes from last year are trend indicators over the specified time period and do not represent a positive or negative value. (e.g., absorption could be negative, but still represent a positive trend over a specified period.)
Additional thoughts:
Two recent transactions, Amazon’s leasing of approximately 500,000 sq. ft. of warehouse space in Lancaster, and Strategic Financial Solutions leasing of back office space in Amherst, both suburbs of Buffalo, which are collectively expected to create in excess of 1,800 new jobs are prime examples of the upbeat activity occurring in both of these market sectors.
Steve Blake, CCIM is a partner in CBRE|Buffalo with over 35 years of brokerage experience in both Canada (Toronto) and the US. CBRE Buffalo, an affiliate office of CBRE, Inc., staffs 16 professionals and offers a full range of commercial real estate services to Erie, Niagara, Chautauqua, Cattaraugus, Wyoming and Allegany counties, and portions of Orleans and Genesee counties. Our industry-leading platform provides unparalleled service to meet any client requirements including: landlord/owner representation, tenant/buyer representation, property and project management, investment sales, consulting, and marketing and research services
For additional information contact Steve at (716) 362-8707 or steve.blake@cbre-buffalo.com
* Source: CBRE Research, Q3 2015/CBRE Limited
** Source: CBRE Buffalo New York, LLC Q4 2015