Upstate New York is currently in a renaissance period as the major initiative of the high technology industry creates momentum for local communities. Centered at the University at Albany, the College of Nanoscale Science and Engineering has been a leader in developing more than $6 billion of infrastructure and research and development focused around the semi-conductor industry, and most recently the solar energy industry.
The relocation of Sematech International’s world headquarters from Austin, Texas, to the edge of the University’s campus in Albany, New York, has established a partnership program focusing the world’s leading semi-conductor makers and related industries in a collaborative effort to develop and manufacture the next generation of chips that power our lives. The College’s most recent announcement of a partnership involving IBM, Intel, Samsung, Global Foundries and TSMC focused on a $4.8 billion deal that is largely funded privately, will result in substantial job growth in categories not previously significant in numbers.
This most recent announcement in September 2011 also spreads the benefits throughout the state in Buffalo, Rochester, Utica, and into the Hudson Valley as new jobs are created in these communities that result from supporting and related industries.
The office sector should begin to benefit from this surge in space requirements as companies, both existing and startup, begin to absorb the existing vacancies within the market. As the initiative begins to spread its reach further into Upstate New York, we expect to see additional needs for on-campus laboratory space and research-focused facilities. RPI will soon relocate many of its office needs into downtown Troy in the renovation of the former Proctors theater.
This re-allocation of the assets of the higher learning facilities will assist in the absorption of all categories of space, but the re-use and redevelopment of existing facilities will dominate those choices, since most of them already have substantial infrastructure in place. This, in turn, will result in creating more demand for housing in locations that have existing standing inventory that can be redeveloped into residential formats that will attract the “boomer” generation back into the cities from the suburbs.
A major solar company has also purchased one of the old IBM chip fab facilities in the Hudson Valley for redevelopment.
The blending of new and old initiatives is leading to a continuum of growth and innovation that will solidify these markets well into the future.
The growth of high-tech industries is creating momentum in the retail market as well. Starting with the second quarter of the year, the level of interest from regional and national retailers looking for locations within the Upstate New York market has been gaining momentum not seen over the last 3 years. Developers are once again beginning to market locations for sites that had been shelved following the downturn in demand for new sites. Developers are finding that tenants within the existing markets are looking for relocation and repositioning opportunities.
The categories that appear to be most active at the present time are the restaurants that are not adequately represented in these markets, certain value-focused retailers like Tuesday Morning or Ocean State Job Lot, and specialty focused operations like regional sleep shops or pet stores.
Shop-Rite recently opened a new supermarket in Niskayuna (Schenectady), New York, and has already announced three more locations under development in the Capital Region. In the case of restaurants, substantial interest has come from quick-serve formats, casual and even higher price point formats like the national steak house retailers and seafood presentations. The more traditional retailers are finding some locational opportunities resulting from the economic downturn’s impact on the market, while others have now realized that certain of these markets are more insulated from the national economic woes than others.
With retail vacancies in most of the markets under 10 percent, and vacancies in the most popular markets being in the low 6 percent range, we are not seeing the decline in rental rates that other markets are experiencing. New retail development in Albany and recent commitments to the western part of the state by retailers not currently represented, are evidence of the level of opportunity that awaits those that realize the stability and resilience of these markets, while positioning themselves to serve the growing populations of high-tech employees and their families.
— Howard Carr, president of The Howard Group/TCN Worldwide