BUFFALO | Development Thread

[westcoastperspective]

Originally Posted by ladsnine

An interesting statistic from the Green Code's facebook page today:

"Did you know? Downtown Buffalo is growing fast, with a 201% increase in housing units (402 to 1,211 from 2000 to 2014) and 81% increase in hotel units (1,325 to 2,408 from 2000 to 2014)!"

I haven't seen an actual figure of residential units and hotel rooms up to this point. 1,211 housing units would suggest a downtown population around 2,000 people. Not to the level of cities with truly vibrant downtowns yet, obviously, but we're starting to get there...

We're averaging less than 100 units/year but units are filled almost immediately. I'd like to see occupancy rates but from what I hear there are few empty units (though turnover is high). With all of the major announcements lately, I wonder if any national residential developers will take notice or are the rental rates too low for "big" rental complexes (4-8 stories, 150-200 units).

Did anyone see the plans for Central Park Plaza? WIVB has a short clip on its website. I'm trying to get info. from Ciminelli. They seem to be on an exciting track based on the sample building types they're showing and the architecture.

[westcoastperspective]

Central Park Plaza scoop:

http://viewsofbuffalo.blogspot.com/2...eveloping.html

[ladsnine]

The current work on the Metro Rail line is to replace the caternary wires in the tunnels been Allen and Humboldt/Hospital stations that are original to the early 1980s construction of the line. Good to see the NFTA is starting to maintain the subway...it's starting to look a bit shabby.

In other NFTA-related news, "construction on the UB Medical School site is anticipated to start March 2014 which will eliminate access to the [Allen St.] station from Washington Street. Construction activities directly impacting the station are tentatively scheduled to begin in November 2014." (per NFTA board meeting minutes)

[ladsnine]

This has been discussed around the development forums, but rendering hasn't been posted here. The new building on the parking lot on Elmwood across from Spot Coffee and Panera that has been proposed for several years is beginning this summer. The project has 24 apartments and is by Benchmark Group as developers. Neighbors have been fighting it because it results in a net loss of parking spaces for the neighborhood - but it seems to have gotten approved. I guess there is hope for Buffalo yet...


(image source: Buffalo News)

A new apartment project, this one by Rocco Termini, is planned for the American Radiator Co. building in North Buffalo across the street from his current FWS project. I know a bit about this building because at one point a couple of years ago I was involved in a project on this building that didn't pan out. The front part is from the late 1920s, but the central rear wing is from the 19th century and was a testing laboratory for radiators and heating equipment like that. At one time, this building was part of a massive factory complex that also included all the adjacent land that Mod-Pac takes up adjacent to the Belt Line. I don't know if Mod-Pac just took over the old factory or built a new one, but anyway they are dissociated now. The 1807 Elmwood building has various light industrial uses and relatively marginal/low-rent office uses in it at the moment. Rocco is proposing 37-38 apartments. The building is 48,000 SF and construction cost is $6.72 million, per the Buffalo News.


(image source: Buffalo Rising)

Link to related Buffalo News article:
Upgrades for Cityscape as Apartment projects in Elmwood Village, North Buffalo are OK'd

[Austinlee]

Originally Posted by westcoastperspective

We're averaging less than 100 units/year but units are filled almost immediately. I'd like to see occupancy rates but from what I hear there are few empty units (though turnover is high). With all of the major announcements lately, I wonder if any national residential developers will take notice or are the rental rates too low for "big" rental complexes (4-8 stories, 150-200 units).

Did anyone see the plans for Central Park Plaza? WIVB has a short clip on its website. I'm trying to get info. from Ciminelli. They seem to be on an exciting track based on the sample building types they're showing and the architecture.

What's the average rent/sale price of units in the downtown area?

There is definitely a price threshold needed for new construction or high-end rehabbing of classic old buildings that must be met to be profitable. That's why all you ever hear of are luxury construction projects because they have to be able to be profitable.
I would say rents need to be around $1,500 and up for apartments and condos need to be selling for approx. $350-$400k and up for new highrises.
That's a guess based on other mid-atlantic/mid-western city projects that I see going up.

[ladsnine]

What's the average rent/sale price of units in the downtown area?

There is definitely a price threshold needed for new construction or high-end rehabbing of classic old buildings that must be met to be profitable. That's why all you ever hear of are luxury construction projects because they have to be able to be profitable.

Downtown Buffalo has almost no for sale condo inventory. City Center Condos is one that does exist, and those go from between $200k for smaller units to $800k-$1M for the penthouse units. The other condo building is the Avant, a rehabbed former federal courthouse tower, where they start at about $200-300k and the penthouse is $1.5M+ for 10,000 SF.

Generally Buffalo's downtown housing supply is apartments, because almost all of it has been financed through historic preservation tax credits, which can be used for rental units only. Historic tax credits provide a 40% rebate for development projects in the downtown area, so it tends to lower required rents a bit. Units at the Lafayette Hotel (completed 2012) go for $800-1400 = +/- $1.00/SF. Units at Genesee Gateway (completed last year) go for $1600 = +/- $1.60/SF. I've heard the threshold for new construction to make sense economically is about $2.00/SF, but that may drop a bit with the availability of tax credits - I'm not sure, since we haven't seen any new construction housing downtown.

[Austinlee]

^Well you may not be aware of the fact that right now, nationally the big banks, the lenders, the ones who decide who gets loans, is almost exclusively lending for rental apartment projects as well as some hotel conversions and new construction. Right this second; March of 2014, condos are not on the list of what the big banks are willing to take risk on.
It's cyclical.

[ladsnine]

I brought up condos because you asked for sales prices in the downtown area. I'm aware that's a down market right now, though Buffalo's downtown renaissance is so new that they were never really an up market here (yet).

And, as you said, hotels are currently an up market. Downtown Buffalo has 10-12 new hotels in various stages of development right now, with 4 of them under construction...

[ladsnine]

If anyone is interested, there is an informational forum tonight at the Central Library (5:30 to 7:30) hosted by Preservation Buffalo Niagara regarding the proposed redevelopment of the Shoreline Apartments on Niagara Street. These were designed by Paul Rudolph in 1974 and are one of Buffalo's only examples of Brutalism. Their owner wants to tear them down and replace them with, I've heard, more of the cheap-o vinyl confections on the east side. Those aren't appropriate on the east side and they certainly aren't appropriate here, on the edge of downtown and in the shadow of City Hall. Plus, these are kind of cool...

[westcoastperspective]

Originally Posted by ladsnine

I brought up condos because you asked for sales prices in the downtown area. I'm aware that's a down market right now, though Buffalo's downtown renaissance is so new that they were never really an up market here (yet).

And, as you said, hotels are currently an up market. Downtown Buffalo has 10-12 new hotels in various stages of development right now, with 4 of them under construction...

There are ten units still for sale at Pasquale at Waterfront Place. I think most are being leased until they are sold. Interestingly, they're all on the lower floors and 'cheaper' priced.

The loft projects downtown are all rental because that is required under the historic preservation tax credit program (five years of rental and then could be converted). Scheinder talked about converting 210 Ellicott to condo about a year ago but I haven't heard anything since.

I've also heard the $2 per sq.ft./month as being necessary for new apartment construction. I think the higher end units are getting a bit over $1.50 now. There's a way to go but maybe there's a market for smaller new builds for folks that don't want the loft look and prefer new construction? Sinatra is planning two mixed-use projects that I assume will be new builds (one at Michigan/Carlton). He hinted about this when buying the Market Arcade. We could hear details this month he told me.

[ladsnine]

Originally Posted by westcoastperspective

There are ten units still for sale at Pasquale at Waterfront Place. I think most are being leased until they are sold. Interestingly, they're all on the lower floors and 'cheaper' priced.

I also know that, when City Center Condos opened in the early 1990s, the higher-priced units were the first to sell. Some of the lower-priced units took years to sell. Not sure why that is.

Also, rehab work has started on the old Waldorf Cafeteria/Howard Shoes building in the 500 block. presumably for the Oshun restaurant. I saw the back door open today when I walked by, with the telltale plastic tubes of asbestos abatement coming up out of the basement.

[Tedious]

Originally Posted by ladsnine

Downtown Buffalo has almost no for sale condo inventory. City Center Condos is one that does exist, and those go from between $200k for smaller units to $800k-$1M for the penthouse units. The other condo building is the Avant, a rehabbed former federal courthouse tower, where they start at about $200-300k and the penthouse is $1.5M+ for 10,000 SF.

Generally Buffalo's downtown housing supply is apartments, because almost all of it has been financed through historic preservation tax credits, which can be used for rental units only. Historic tax credits provide a 40% rebate for development projects in the downtown area, so it tends to lower required rents a bit. Units at the Lafayette Hotel (completed 2012) go for $800-1400 = +/- $1.00/SF. Units at Genesee Gateway (completed last year) go for $1600 = +/- $1.60/SF. I've heard the threshold for new construction to make sense economically is about $2.00/SF, but that may drop a bit with the availability of tax credits - I'm not sure, since we haven't seen any new construction housing downtown.

Most of the condos for sale 'downtown' are in waterfront village. There's always at least a dozen for sale it seems, going for between 200k and 700k. They are all pretty damn ugly though, with the Pasquale being only slightly better. To me it's hard to justify paying 200k for a small 1br condo downtown when you can have a nice house with a yard in a good area of the city for less. If they were fabulous condos I might think differently, but no one has stepped up to offer a better product to buy.

[ladsnine]

Originally Posted by Tedious

Most of the condos for sale 'downtown' are in waterfront village. There's always at least a dozen for sale it seems, going for between 200k and 700k. They are all pretty damn ugly though, with the Pasquale being only slightly better. To me it's hard to justify paying 200k for a small 1br condo downtown when you can have a nice house with a yard in a good area of the city for less. If they were fabulous condos I might think differently, but no one has stepped up to offer a better product to buy.

Waterfront Village is also pretty much a suburban development in the city. It's cut off from everything and is low density (aside from the couple of highrises) with poor-quality materials and its pretty much straight out of the 70s and 80s. If you want that sort of thing, why would people buy downtown? You could get the same thing (minus the lake views) for a quarter of the price in the suburbs, with all the supposedly better amenities out there.

The city of Buffalo's product is really two things: Buffalo's actual downtown remains one of the stronger and more urban downtowns in the northeast, so it offers a real vibrant urban place filled with great historic buildings. And the neighborhoods offer low-rise living in tight-knit, beautiful old places with the amenities of a city, like decent public transit, bike- and walkability, block clubs, and being part of a community where people can sit on their porches and talk to each other, etc. Problem is - Waterfront Village offers neither of these things. It tries to compete directly with the suburbs on their own turf, which doesn't work all that well...and, the result is a poor utilization of waterfront land.

[ladsnine]

I read just the other day in one of those terrible Forbes things of the "worst cities in America" or something like that that Buffalo's city government was bankrupt. Their "research", of course, is way out of date. That was true in the early 2000s, but is definitely not true anymore:

S&P upgrades credit rating for city from A to A+

The City of Buffalo’s credit rating from Standard & Poor’s increased, from A to A+, which could help the city secure a lower interest rate when it borrows money next month for capital projects.

Comptroller Mark J.F. Schroeder said S&P cited the strength of the city’s reserve accounts, as well as developments in health care and high-tech manufacturing that could add to the city’s employment and tax base.

Moody’s and Fitch also released ratings for the city this week, and they were unchanged at A1 and A+, respectively.

(from the Buffalo News today)

[westcoastperspective]

Originally Posted by ladsnine

Waterfront Village is also pretty much a suburban development in the city. It's cut off from everything and is low density (aside from the couple of highrises) with poor-quality materials and its pretty much straight out of the 70s and 80s. If you want that sort of thing, why would people buy downtown? You could get the same thing (minus the lake views) for a quarter of the price in the suburbs, with all the supposedly better amenities out there.

The city of Buffalo's product is really two things: Buffalo's actual downtown remains one of the stronger and more urban downtowns in the northeast, so it offers a real vibrant urban place filled with great historic buildings. And the neighborhoods offer low-rise living in tight-knit, beautiful old places with the amenities of a city, like decent public transit, bike- and walkability, block clubs, and being part of a community where people can sit on their porches and talk to each other, etc. Problem is - Waterfront Village offers neither of these things. It tries to compete directly with the suburbs on their own turf, which doesn't work all that well...and, the result is a poor utilization of waterfront land.

I'm not going to hate on Waterfront Village too much. Yes it should be higher density but there was not (and maybe is still not) a market for 1000 or more units there (I count 358 currently). Some of the developments aren't attractive (looking at you Lakefront Commons and Portside) and the towers only have units facing the lake. I will say the Rivermist units are very well constructed and they're fantastic. Three levels, open floor plan, right on the water. Most have been renovated where owners have removed the 1980s 'European' kitchens (white cabinets). Nearly all sell for over $500k now.

We all dream about outer harbor development but it's been 30 years and Waterfront Village still isn't filled in. There's a parcel along Lakefront empty where the neighbors sued to block more townhouses that actually looked better than their own, there's the remaining land at Portside where Casa Luce was going to be built (died), Ellicott Development's Waterfront Place, and parcels where The Carlo is going.

[Austinlee]

Originally Posted by ladsnine

Rendering has been released for RiverBend:



From the Buffalo News this morning:
Link to story

Realistically, as in, not what the developers are saying but, word on the street conversation level, what are the chances of this great projects actually coming to fruition?

[ladsnine]

Originally Posted by Austinlee

Realistically, as in, not what the developers are saying but, word on the street conversation level, what are the chances of this great projects actually coming to fruition?

Maybe someone with a longer history of experience watching Buffalo development can chime in here in case I'm speaking with naivete, but the word on the street is that this project is happening, though perhaps not to the maximum buildout you see here (at least not for a while). It is based on the model for a similar project in the Albany area that was built and has been extremely successful. A couple of years ago Gov. Cuomo announced a billion dollars for economic development in Buffalo and so far he's lived up to his word and spent/allocated over $300 million of it. For this project specifically, I've read that the transfer of the land (from the City, the current owner) is moving forward and the companies are already signed on. We'll know soon enough, since construction is supposed to start later this year.

[ladsnine]

Buffalo is finally getting a shipping container building!! (assuming it gets through the various city approval boards). Every project Rocco has announced has happened, so I expect this will happen.

Termini's next venture: Meals in a shipping container

[Rocco] Termini is working with Buffalo officials to gain approval for his latest project: a plan to link six shipping containers that will be enclosed in a 22-foot wide by 70-foot long enclosed structure for his latest restaurant development. Set for a sliver of a space at 128 Genesee St. and just across from Eddie Brady’s and the Genesee Gateway building, Termini will be presenting his concept to the Buffalo Planning Board when it meets on March 11.

If approved, Termini hopes to have the structure and the containers in place by late spring or early summer.

Here's the site: (not really the most inviting little shred of land)



The city really needs to get on that streetscaping project they have planned for this stretch. How long have they been talking about that??

[homestar]

Originally Posted by westcoastperspective

The loft projects downtown are all rental because that is required under the historic preservation tax credit program (five years of rental and then could be converted).

It seems like there were a bunch of these projects completed during the mid to late 2000's that should be eligible for conversion by now.
I guess they are all just content keeping them as rentals.

Originally Posted by Tedious

Most of the condos for sale 'downtown' are in waterfront village. There's always at least a dozen for sale it seems, going for between 200k and 700k. They are all pretty damn ugly though, with the Pasquale being only slightly better. To me it's hard to justify paying 200k for a small 1br condo downtown when you can have a nice house with a yard in a good area of the city for less. If they were fabulous condos I might think differently, but no one has stepped up to offer a better product to buy.

You hit the nail on the head, and I think this is partly what is holding back the condo market in Buffalo. Nobody wants to spend $200k + fees + taxes on a condo that is no better than a $800/mo rental apartment, yet that is what many are. But rent prices have been climbing recently in the city, so that might help boost the condo market.

Originally Posted by ladsnine

Waterfront Village is also pretty much a suburban development in the city. It's cut off from everything...

And ironically, they designed it to be cut off from the water too which defeats the purpose of living there. The ones right on the water have direct private access and amazing views, but all the townhouses behind them get no views and no access. They didn't provide any public access to the water so their only option is to walk to LaSalle park (which is severely underfunded and in need of repairs) or walk to the marina which has no real pedestrian connection to the condos.

Originally Posted by westcoastperspective

We all dream about outer harbor development but it's been 30 years and Waterfront Village still isn't filled in. There's a parcel along Lakefront empty where the neighbors sued to block more townhouses that actually looked better than their own, there's the remaining land at Portside where Casa Luce was going to be built (died)...

I've been wondering about both those projects recently. The Casa Luce one looked like it was a prime spot with water views. The townhouse one would have been great with the rooftop patios, if the neighbors didn't squash it. Nobody will ever build on that site without allowing some way to see the water.

Originally Posted by Austinlee

Realistically, as in, not what the developers are saying but, word on the street conversation level, what are the chances of this great projects actually coming to fruition?

Most Buffalonians have seen Plans, Projects, and Promises come and go for decades with many (most) of them either failing to even start, or starting but failing to complete. So a project like this new one doesn't get a huge reaction from people. Once they start building it there might be a more positive feeling. But given the amount of subsidies involved it won't be considered a success until it starts to grow on its own, which could take years.

Originally Posted by ladsnine

Buffalo is finally getting a shipping container building!! (assuming it gets through the various city approval boards). Every project Rocco has announced has happened, so I expect this will happen.
...
The city really needs to get on that streetscaping project they have planned for this stretch. How long have they been talking about that??

Sounds like a very cool project. And I agree on the streetscaping. The city needs to start fixing this part of town. All those new office people won't be able to spend any money if they can't cross the superhighways called Oak and Elm.

[westcoastperspective]

Originally Posted by ladsnine

Buffalo is finally getting a shipping container building!! (assuming it gets through the various city approval boards). Every project Rocco has announced has happened, so I expect this will happen.

The city really needs to get on that streetscaping project they have planned for this stretch. How long have they been talking about that??

Not every Rocco project has happened - AM&As conversion. Maybe someday.

I hear the Genny project will be a grill (hot dogs).