Few doubted that Medical Campus investment would spread across Main Street to Buffalo’s already trendy Allentown neighborhood. But some are surprised how fast the surge occurred, how far it extended and how much prices have risen.
The News identified 28 Medical Campus-related building sales or major renovations in Allentown over the past five years, representing more than $41 million in investment – purchase and renovation costs – so far, and tens of millions of dollars more expected in coming years.
The change is already being felt in rents. Landlord and developer James R. Swiezy says Allentown apartments now typically rent for $1.25 to $1.40 per square foot, compared with 80 to 90 cents a decade ago. Commercial property values are increasing as well. In 2009, Buffalo chiropractor Scott A. Croce paid $460,000 for the 9,600-square-foot former Cloister Restaurant building on Delaware Avenue (1) , three blocks from the Medical Campus. In 2014, developer Nick Sinatra bought a slightly smaller 8,000-square-foot office building on North Street between Elmwood and Delaware avenues (2) – four blocks from the campus – for $1.39 million.
About half of the Allentown investment so far is on Main Street just across from the Medical Campus, turning the 800 block (3) – long a public eyesoar – into a picture postcard of urban renewal and the 900 block (4) into a construction zone.
Twenty years ago, for example, the city foreclosed on a cluster of buildings on the 800 block of Main that First Amherst Development eventually took title of, then spent $6.4 million renovating into Granite Works (5) – 29 upscale apartments with commercial space. There’s now a waiting list for some of the apartments, said First Amherst’s president, Benjamin N. Obletz.
Not far from the Granite Works, Greenleaf’s Swiezy seven years ago paid $70,000 for a dilapidated building at 916 Main (6). Swiezy now plans to buy the city-owned building next door at 918 Main (7) and spend $5.6 million converting both the buildings into 23 apartments with commercial space. Just up the street, Ciminelli Real Estate is purchasing the Salvation Army Buildings, with plans for a residential/commerical pavillion(8).
“The great momentum on the Medical Campus has been terrific,” Obletz said. “When we started down there, it was really a forgotten neighborhood in the city.”
Just north of the Medical Campus, off-campus property can be a shorter walk to the medical school than buildings on the other side of the Medical Campus itself.
The result: One of the priciest areas for real estate investors are the blocks abutting the northern edge of the Medical Campus. Just four current projects could represent well over $100 million in investment.
Developer Nick Sinatra talks about the former Wayne and Waldorf Apartments (15) he bought just south of Summer-Best Street as if it is an on-campus property – partly explaining the $1.65 million price tag, four times what the prior owner paid in 2002.
The Paladinos went even bigger, buying the former Our Lady of Lourdes compound (16) and 13 residential properties on nearby St. Paul Mall (17) for almost $1.4 million. For the 13 St. Paul Mall properties alone, the collective price tag was almost $1 million – for 0.85 acres of land, roughly what prime downtown business property costs.
“If I were to do retail, it’s close enough that you can walk to campus,” said William Paladino, Carl Paladino’s son and now the Ellicott Development CEO.
Closer to campus, but east of Main Street, Mark Trammell, owner of Pilgrim Village (18), plans to overhaul the subsidized housing development sitting behind St. Paul Mall, adding market-rate and student housing and retail stores. The first phase would cost $50 million, Three other phases are planned, which could represent another $150 in future investment.
Also within walking distance, a local surgeon, Dr. Fadi Dagher, and his partner are spending $6 million to bring a a 60-room Sleep Inn to the area (19).
Northern Main Street corridor
In many ways, the Metro Rail line is Main Street for the Medical Campus. Parking will be scarce for campus employees, so developers have turned the Metro Rail line into a residential spine.
The News identified 24 properties north of the campus that developers bought or renovated during the past five years, with a current or planned connection to the Medical Campus. The development represents $50 million in sales and development so far, with millions more expected in future renovation of recently sold properties.
The power of the rail line can be seen at Main and West Ferry, a short walk to the Utica Street Metro Rail station, where developer Nick Sinatra spent $1.1 million on five run-down buildings (20). He is spending $3.5 million more to convert them into 35 upscale apartments and 7,500 square feet of retail space.
“When I bought Main and Ferry, everyone said I was nuts,” Sinatra said. “Now I’m a pioneer. There’s a huge demand for housing. Main and Ferry sold out before it was done.”
Ciminelli Real Estate pushed the northern boundary of the medical corridor all the way to Hertel Avenue – 3.6 miles north of the Medical Campus. In 2011, Ciminelli bought a vacant, 98,000-square-foot industrial building on Main Street just south of Hertel Avenue for $1 million, about twice what a New York City investor paid five years earlier. Ciminelli spent $15 million renovating the building into 87 apartments now dubbed the Bethune Lofts (21).
“We bought Bethune because we knew there would be a direct connection with the Metro line and the Medical Campus,” said Ciminelli Real Estate president Paul Ciminelli.
South of the Medical Campus
Medical Campus deals are also traveling south toward the downtown business district, though the $72 million planned investment is inflated by a single building – the $51 million Catholic Health System (9) headquarters Uniland is building on Uniland-owned property two blocks south of the Medical Campus.
Beyond the Catholic Health System building, Uniland is buying the nearby Frey the Wheelman (10) buildings on Ellicott and Tupper streets for $1 million to $2 million. Uniland, headed by Carl J. Montante Sr., plans to spend $5 million more to convert the century-old buildings into a technology hub, capitalizing on its location between the Medical Campus and downtown Buffalo.
TM Montante Development, headed by Carl Montante’s brother Thomas, in 2012 bought the former Spaghetti Warehouse (11) even farther south – on lower Elm Street – for $700,000, about twice its assessed value. TM Montante plans to spend $7 million more to create apartments and commercial space.
Near East Side
Development on Buffalo’s East Side – at least the near East Side streets coming off Main, as well as the Fruit Belt and neighborhoods east and northeast of the campus – is inevitable, developers say.
As property west and north of the Medical Campus gets pricey, more developers will look east. Already, LP Ciminelli, owned by Paul Ciminelli’s brother, Lou, bought the former Central Park Plaza (12) to turn into a residential/commercial project with a $30 million price tag. The property is located southeast of the Amherst metro rail station.More recently, two local businessmen – Brett Fitzpatrick and Aaron Siegel – paid almost $8.6 million for a 200-unit apartment building on East Amherst Street (13), about two blocks from Central Park Plaza. They plan to invest another $1.2 million on building improvements.
Closer to the campus, nine different investors spent a total of $371,000 buying 21 houses over the past two years, most in the Fruit Belt but a few just north of Best, the News found. The houses sold for between $5,000 and $35,000 each. Paladino companies bought another 22 properties east of Main Street in the past five years – 10 of which were then resold to the Health Science Charter School (14) – representing another $1 million in sales.
“We think there are some needs that we can help answer, especially the housing needs and also possibly the hotel needs,” said Carl Paladino.
Spurred by the Central Park Plaza, the East Side development is already at almost $50 million. Plans for privately funded student housing east of Main on LaSalle Street, primarily serving the University at Buffalo’s South Campus but also available to medical students, represent another $40 million.