By Michael J. Montante, CEO, Uniland Development Company
Buffalonians enter 2023 and the upcoming spring with a sense of appreciation that the pandemic is behind us and with curiosity about what is on the horizon. Business owners are considering what their offices should look like in this new era. Equally important, warehousing and manufacturing companies are exploring ways to improve operations and strengthen their supply chain resiliency with newer, more efficient facilities.
Here are some of the ways these types of commercial real estate are moving forward across Buffalo Niagara:
The long-term state of the office market is still unknown as return-to-office and hybrid workplace styles are explored. What is clear is that the office has changed. Today’s office has evolved from a place where your desk was your center of gravity to an environment where the whole workplace must become a destination.
There is a distinct focus by employers to make the office a more desirable place for the employee to spend their workday. The new office recipe is no longer private offices and rows of cube farms with some conference rooms on the periphery. Today, companies are intentionally seeking more open areas, collaborative spaces, enhanced lounges, and enjoyable break rooms.
At Uniland, we partner with many office clients to rethink their space as they explore how their people work and get their jobs done. We see a newfound appreciation for the office as a place where companies can strengthen their corporate culture and foster greater collaboration and innovation. It’s a new era for organizations that are open to reimagining their workspaces.
Western New York has a rich industrial heritage and a bold future. A case study for this industrial sentiment locally is Renaissance Commerce Park in Lackawanna. Under the leadership of Erie County Executive Mark Poloncarz, the County’s Industrial Development Agency and Industrial Land Development Corporation (ECIDA/ILDC), New York State DEC, and the City of Lackawanna, in a public-private partnership with Uniland and other businesses, the former Bethlehem Steel site is now a burgeoning economic engine overlooking Lake Erie. In 2022, Uniland completed 8 Dona Street, its first of two planned 150,000 SF industrial buildings on Route 5. A second building, 2 Steelworkers Way, will break ground later this year.
Collectively, the Buffalo market lacks enough available industrial space to meet demand. Our region’s industrial vacancy rate, which was already tight in 2021 at 1.5%, tightened further in 2022 to 1.3%. As we work with businesses such as 8 Dona’s anchor tenant Total Quality Assurance International, it is key to have government partners who are experts in economic development. We have been extremely impressed working with the City of Lackawanna in terms of zoning, entitlements, infrastructure, and other key project elements. Nationally, recent federal legislation has created incentives for businesses seeking to expand their onshore manufacturing. To leverage this opportunity, businesses nowadays typically demand existing industrial buildings to occupy in a few months. To achieve this, the public and private sector must work together to develop more speculative buildings to accommodate the increased demand for warehousing, logistics and manufacturing.
The good news is, Buffalo’s industrial market offers competitive advantages over other regions. For example, Uniland has industrial properties in Lackawanna and Tonawanda where lease rates start in the $7 per square foot range. Offering easy access to Canadian bridges and major shipping routes, these locations are very cost-effective compared with Canadian industrial space, which is priced at $14 to $18 a foot in Greater Toronto. Buffalo provides a great foothold for many companies throughout the Northeast, including those based in Southern Ontario, who are exploring economical sites for their distribution and light manufacturing operations.