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Ciminelli Real Estate Corp. seeks expansion out of town for faster growth

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Paul Ciminelli at 201 Ellicott

Paul Ciminelli, president/CEO of Ciminelli Real Estate Corp.

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Except for its professional football team, Paul Ciminelli loves eastern Massachusetts.

The region surrounding Boston has long had a growing population and strong demographics.

It's a hotbed of innovation and technology, with "probably the most dynamic education structure in the country." And it has a blend of old and new – both economically and architecturally.

"I've always admired the greater Boston area," said the owner of Ciminelli Real Estate Corp. "It's kind of been an anomaly for the Northeast."

That's also why Ciminelli is buying office buildings and other properties in the Boston area to broaden his Buffalo-based firm's holdings in a faster-growing marketplace.

"We’re always looking to diversify," Ciminelli said. "We have investment funds that are partners of ours that are always looking to diversify. We have to prove to them that we have a strong enough operating platform that they feel comfortable investing."

In the last few years, Ciminelli has made six acquisitions in Massachusetts – including four in the last 12 months. It's purchased buildings in Northborough, Marlborough, Foxborough and Andover. Most recently, the firm teamed up with restructuring and investment firm Gordon Brothers – its second such joint venture – to buy two Class B office buildings in the northwestern Boston suburb of Wilmington.

The two firms paid $33.75 million for 210,945 square feet of office space, on 15.38 acres, in what Ciminelli described as a "bustling research and development area." They plan to convert the buildings into research and development space, capitalizing on rising demand in that category and rising rents in the I-93 corridor.

In all, Ciminelli Real Estate now has nearly 500,000 square feet of space in the Boston area, with aspirations for more.

But Massachusetts isn't the only market for Ciminelli outside of Western New York. Overall, Ciminelli has omore than 23 million square feet of real estate that it owns, manages or developed in New York, Florida, Massachusetts and Pennsylvania, and it has regional administrative offices in all four states.

The firm has been operating in Florida for 22 years, and now manages 7 million square feet of space in 110 properties. Of those, 52 are office buildings, while the rest is split between retail and industrial or flex space. In some cases, it also teams up with its joint-venture partner, JCR Capital.

Its state headquarters is in Tampa, but it also has offices in Tallahassee and Fort Lauderdale, with 50 employees in all.

"That gives us the opportunity to invest throughout Florida because we already have coverage with our real estate operations," Ciminelli said. "We’re fortunate to have some good joint-venture partners."

In Pennsylvania, Ciminelli's work is almost exclusively property management, not investment or acquisition, and it's driven by its real estate clients who hire the firm to manage their buildings. The company's Pittsburgh office oversees that business and operations not only in the Keystone State, but also in eastern Ohio, western Virginia and Maryland.

Its customer base includes real estate investment trusts, corporations and private-equity funds.

"That's driven more by where our clients want us to be," Ciminelli said.

Ciminelli said the Florida and Massachusetts markets are much more "transactional" than in Western New York, so the firm pursues a strategy in the other states of buying-to-flip rather than buy-and-hold.

Typically, he said, the developer only retains those properties for three to four years – long enough to reinvest in the properties and reposition them for a profitable sale.

"There’s more institutional money flowing into and out of those markets," he said. "Buffalo is more of a traditional real estate market, where most of the developers hold onto their real estate assets longer. So there’s not as much real estate investment transactions as there are in those other markets."

However, he stressed that the effort to diversify is not reflective of any dissatisfaction with Buffalo. Western New York is still the only market in which it develops projects from the ground up.

"We feel very comfortable committing development dollars in Western New York. It’s our hometown," he said. "We feel most comfortable doing it here, because this is where our roots are."

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Ciminelli Real Estate Corp. is making waves in eastern Massachusetts, with the first of what it says will be many purchases in the Boston marketplace. The Buffalo-based developer and property manager paid $6.5 million for a 61,177-square-foot office and laboratory building in Marlborough, Mass., just outside Boston. Located at 33 Locke Drive, the building is 95% leased, according to

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