State and local economic development officials are working to land an unidentified European manufacturer that is considering New York and several other states among its options for an expansion project.
Invest Buffalo Niagara – formerly Buffalo Niagara Enterprise – is reaching out to local developers to identify potential industrial real estate options for the company, which has been dubbed "Project Adler," according to a solicitation that was sent out to developers on behalf of Empire State Development Corp.
That's often how new projects begin, as government officials seek to find space they can specifically market that will meet a candidate's needs. Such solicitations are also not unusual and don't always lead to success. But they are still indications of opportunities that are out there for states and regions.
The project code name is usually not indicative of the company's name, which local officials often don't even know at this early stage. Alan Rosenhoch, Invest Buffalo Niagara's director of business development, declined to comment, citing confidentiality of ongoing initiatives.
Rather than build new, the solicitation said, the European firm is seeking to lease an existing building of 70,000 to 100,000 square feet, with about 80 percent of the space for production and another 20 percent for warehouse.
The facility must have ceiling heights of at least 24 feet and multiple loading dock doors. And it has to be located within 30 miles from the Niagara Power Project in Lewiston, indicating the company would seek low-cost hydropower from the New York Power Authority as part of an incentive package, according to the solicitation.
However, finding that could prove challenging in Western New York, where the amount of vacant industrial space is at a record low level, with a vacancy rate of just 3.4 percent, according to a new report from brokerage firm CBRE Buffalo.
Real estate brokers, economic development officials and even companies have long complained that there's a significant shortage of manufacturing and warehouse options in the Buffalo market. Those buildings that are available are often snapped up or even converted to other uses, while developers are hesitant to build without having a tenant locked up.
"The industrial real estate market in Western New York is tight and now tightening," said Invest Buffalo Niagara Research Director Matthew Hubacher.
That's starting to change, as a couple of new projects come online. But in the meantime, experts fret that the tight market could leave Western New York at risk of losing new business because the region is unable to fulfill companies' requirements.
It's particularly a problem when companies want to buy an industrial building instead of leasing it, or when they are seeking existing facilities of at least 100,000 square feet or with "significant electrical infrastructure" of at least 2 megawatts of power, with the capacity for more, Hubacher said,
And if a client wants more than one of those three factors, there are only a handful of options in the region.
"It’s more difficult to fill these types of large industrial requests than in the prior 10 years," Hubacher said. "There are not a lot of existing industrial buildings available for purchase. It’s not that there are none, but not as many as five, 10, 15 years ago."
Of course, Project Adler doesn't have those requirements. And Hubacher said IBN hasn't seen a drop in interest generally among companies in locating in Buffalo Niagara.
Nevertheless, he agreed that the region needs more inventory . "We believe there is an opportunity for local developers to capitalize on not only the demand from advanced manufacturing projects interested in the region, but also an opportunity to capitalize on having existing industrial real estate ready to go so that when we see expressions of interest, we have a more robust offering," he said.