Buffalo Next: To add factory jobs, you need space. And there’s not enough | Business premises

Commercial recruiters can introduce manufacturers to the attractiveness of the workforce, quality of life and universities in the Buffalo Niagara area.

But it’s hard to seal the deal if there’s nowhere a business can get up and running quickly.

It’s a problem recruiters encounter frequently, with vacancy rates so low for industrial space here.

Tom Kucharski, president and CEO of Invest Buffalo Niagara, said several years ago that he and his team were frustrated to see projects they felt the region had landed instead of going to places like Washington State or Texas.

“We didn’t have a place where we could put them, either in an existing or adaptive reuse facility, or on a site that was either off-the-shelf or part of a (commercial) fleet. “, Kucharski said at a recent meeting of the NAIOP Upstate. New York.

This is because much of the existing suitable industrial space had already been filled. And developers were building very little new space.

Lowest vacancy rate

According to CBRE-Buffalo, warehouses and industrial space in the region had a vacancy rate of just 1.5% last year, a historically low level. It was also the 18th consecutive year that the region’s rate was lower than the national average. Developers are often reluctant to build a new building to “specification” – meaning a tenant hasn’t already committed to it – to ensure they get a return on their investment.

The risk for corporate recruiters is that if the Buffalo Niagara region does not have a suitable site to market, that project will be moved to another part of the country that does.

And it’s not just about existing buildings. Even some land promoted as “ready to start” might elicit a different reaction from consultants, who say these sites might have been considered ready to start five or 10 years ago, but need investment to maintain that status today, Kucharski said.

Invest Buffalo Niagara and its partners commissioned a study from Newmark Knight Frank, a brokerage and consulting firm, to take stock of the sites – buildings and undeveloped land – that the Eight Counties region had to offer. The objective was to analyze the competitiveness of the region for investments compared to certain other regions.

The report says the region must “recommit to improving site preparation and project timeliness to effectively prepare for the development of cutting-edge industrial property. Land use planning must be simplified and streamlined to facilitate investment, attraction and project success.”

It’s not as if the region has failed to attract new manufacturing investment lately. Far from there. General Motors is injecting $154 million into its Lockport component plant. Moog Inc. is investing $25 million in its local operations. Sumitomo Rubber USA has launched a $129 million investment in its Tonawanda tire plant. And an emerging manufacturer, Viridi Parente, has raised $100 million from investors to advance its green tech plans in Buffalo.

These investments capitalize on manufacturers already present in the region. Corporate recruiters are also keen to lure big-ticket newcomer projects, like the $17 billion semiconductor fab Samsung chose to build in Texas. Samsung said Science Technology Advanced Manufacturing Park, or STAMP, in Genesee County was a contender for the project. (Another company, Plug Power, is developing a factory in STAMP as the park’s inaugural tenant.)

Meanwhile, Amazon plans to build a $300 million mega-warehouse in the city of Niagara – a project that was pushed back to Grand Island. The warehouse will be built on undeveloped land near the Niagara Falls International Airport.

Some encouraging developments

Kucharski said it was encouraging to see Uniland build a $17 million warehouse in Lackawanna on “spec.” The developer is planning a companion “spec” warehouse, valued at $20 million, in the same city.

Kulback’s Construction, Sonwil Distribution and Pinto Construction also have ongoing construction projects. This reflects changing market dynamics: developers are more confident of finding tenants for new properties once they are built.

Kucharski said it’s critical the region has more business-ready facilities or utility-served land that businesses can easily build on.

Newmark in its report made a similar point, saying the “major site plan review” for any development over 5,000 square feet could be changed to apply only to larger projects.

“Businesses expect availability, speed and certainty,” the report says.

Want to know more? Three stories to catch up with you:

• CRBE study finds tight industrial vacancy rate, boosting office and retail sectors

• Uniland plans second Lackawanna warehouse in new Renaissance Commerce Park

• Amazon mega-project gets better reception in Niagara despite traffic concerns

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Five reads from Buffalo Next:

1. Build a New Buffalo Bills Stadium expected to create 10,000 local jobs for construction workersbut some contractors feel left out due to the stadium pact, including plans for a project labor agreement that requires contractors to pay prevailing wages.

2. The remarkable revival of the house of Bethlehem Steel: With a handful of new developments, and more on the way, the gated Bethlehem Steel complex is becoming a sign of renewal.

3. For WNY workers, experience really pays off: Experienced workers in Western New York earn more than twice as much, on average, as entry-level employees.

4. M&T Bank pledges $300,000 to EforAll entrepreneurship program in Buffalo: EforAll, which opened an office in Buffalo in May 2021, is a national nonprofit organization that helps people from underrepresented communities start and grow their own businesses.

5. The state budget includes capital funding for the new UB Engineering Building: The budget includes $68 million for the University at Buffalo to construct a new building for its engineering school.

Keep up to date with news related to Buffalo Niagara’s economy:

Information Industry Veteran Mike Connelly, 65, editor of The Buffalo News for nine and a half years, is retiring next month. Connelly led the newsroom through many transitions in a rapidly changing business, including establishing a digital publishing schedule and adapting to the challenges of Covid-19 coverage.

LCB Capital hopes to bring a new five-story building with 44 market-priced apartments to Delaware Avenue in Allentown. The Kenmore-headquartered real estate company already owns eight residential and commercial properties in Buffalo and Kenmore.

For the first time in over a decade, mortgage rates hit 5% – from 3.1% in December – driving up the cost of buying a homewhich could lead to slower sales and more modest increases in house prices, according to M&T Bank’s chief financial officer.

New state budget provides an additional $20 million for theaters, performing arts centers and museums outside of New Yorkplus an additional $4 million earmarked for upstate zoos, botanical gardens and aquariums from the National Environmental Protection Fund.

Buffalo Niagara region’s unemployment rate fell to 4.3% last month – the lowest for any March since at least 1990, the state Labor Department reported Tuesday. The report also showed how strong the demand for workers is among local employers, with the local workforce growing by 5,200 people in March.

Kaleida Health’s HighPointe on Michigan nursing home in Buffalo has been hit with a $40,000 fine by the state health department — tied for the 11th-largest fine the health department has imposed on any nursing home in the past two decades — over lapses in Covid testing frequency -19 and missed temperature tests of some employees.

Some companies, such as Independent Health and Freed Maxick, are embracing “hospitality,” where remote employees book a workstation for the days when they come to the office to do their job, rather than having their own dedicated desk.

Hiring is accelerating, but the region has a lot of catching up to do: Businesses are heading into a potential downturn with a reduced workforce rather than a full workforce. It would certainly reduce the pressure to cut staff if things went wrong.

The Buffalo Next team gives you insight into the economic revitalization of the region. Email tips to [email protected] or contact Associate Business Editor David Robinson at 716-849-4435.