By James Fink | Buffalo Business First | Oct 15, 2021, 6:00am
State of Region: Developers navigate supply chain issues, financing challenges (Video)
There are encouraging signs of a post Covid-19 development rebound in Western New York.
That’s according to the panel from the State of the Region: Commercial Real Estate discussion presented by Phillips Lytle LLP and Business First on Oct. 7. The panelists were:
- Christian Campos, TM Montante Development president
- Tyra Johnson Hux, LISC WNY deputy director
- Kimberly Nason, Phillips Lytle partner
- Nick Sinatra, Sinatra & Co. Real Estate CEO
Adam Walters, Phillips Lytle partner, moderated the discussion.
“We are finally at the point where we are seeing development spread to other parts of the city,” Walters said.
Signs of progress show up in TM Montante’s projects in Niagara Falls and the Gates Circle neighborhood in Buffalo, as well as Sinatra moving ahead on a $30 million Heritage Pointe apartment complex at Canalside and the number of applicants at LISC WNY’s East Side programs.
“For the longest time, we seemed to be operating in a no-growth environment,” Campos said. “Now we are seeing signs of growth.”
Sinatra agreed: “When I was growing up, people were begging for development, especially in downtown. Now we are starting from a much different foundation.”
Nason said development projects are moving through the municipal approval process at a pre-Covid pace.
“We are seeing municipalities that feel more comfortable (with Zoom meetings) and that willingness is helping to move projects along,” she said.
Hux said there’s plenty of movement in Buffalo’s East Side, but she is concerned that development is resulting in the gentrification of some Buffalo neighborhoods.
“Many neighborhoods have seen a divestment where wealth is being taken away,” she said. “There is no easy answer when it comes to gentrification. It’s about shaping your community.”
Sinatra said supply chain issues have increased the cost of lumber for the two Heritage Pointe buildings by $3 million. It’s similar for steel but the increase is not as steep. Work has started and should be tenant-ready within 14 months.
Campos predicted that post-Covid issues, including people working from home instead of offices, will impact commercial development.
“There’s a lot more (office) vacancy than previous years,” Campos said. “Covid has changed the risk profile in a lot of eyes.”