Commercial real estate opportunities abound in Rochester area

When it comes to the best opportunities for commercial real estate in the Rochester region in the next few years, the sky truly remains the limit.


“There really isn’t a bad sector to be in,” said Amanda P Shisler, vice president, relationship manager-CRE for Evans Bank, a Buffalo-based full-service financial institution with locations in Fairport, Penfield, Perinton, and Irondequoit.

In commercial real estate — which encompasses properties used specifically for income-generating purposes — there are several key sectors or asset classes, including office, industrial, multifamily housing (ex. apartment complexes), retail and flex (lightly zoned space that can be used for a myriad of purposes).

The 2023 Rochester CBRE|Rochester’s annual Real Estate Market Outlook, which was released last month, showed good news in many of these sectors. One was industrial, which had a vacancy rate of 5.1% for year-end 2022. This rate is about 1% higher than the national average and well below the 10-year average.

Among the key market developments in Rochester’s industrial sector in 2022, the CBRE report points to Amazon’s new 2.6 million square foot robotic solution fulfillment center in the Town of Gates which, after some delays, is expected to open early in the third quarter of 2023. Amazon’s $412 million project is expected to create 1,000 jobs.

Other key market developments per the CBRE report were C&M Forwarding Company’s continued expansion in the Town of Chili, CooperVision breaking ground on a 150,000-square-foot expansion in Erie Station Business Park and development at the new Wiregrass Business Park in the Town of Henrietta.


“We continue to see strong growth in the industrial space,” said Charles J. Vita, executive vice president – chief lending officer of Canandaigua National Bank & Trust, who notes Rochester’s industrial sector is currently anchored by a need for warehousing, research and development, and flex spaces. “We expect industrial to continue to be strong.”

Industrial is one of two sectors that “jumps out” to Shisler as prime for continued opportunity in the years ahead. The other is multifamily.

“As a nation and especially in Rochester we have a housing shortage,” Shisler said. “There isn’t enough stock, especially in the affordable housing range.”

In January 2023 New York Governor Kathy Hochul announced a statewide strategy to address New York’s housing crisis by building 800,000 new, affordable homes for rent or ownership over the next decade. Per the Population Reference Bureau, in 2020, 51% of renters in New York renters were housing-cost burdened, meaning that they pay more than 30 percent of their income on rent.

One of the ways the state hopes to meet this goal is to incentivize the repurposing of underutilized office parks and strip malls as multifamily housing.

“Multifamily jumps off the page,” said Vita, among the best opportunities for commercial real estate in the region in the years ahead. This is very much due to supply-driven issues. He notes there is currently not enough supply of individual, single-family homes in the Rochester region to keep up with demand, which has led to more interest and need for multifamily spaces.

2022 showed record high prices for single-family homes sold in Rochester coupled with a historically low number of homes for sale and a fall in sales. New listings in 2022 fell 8.5% to 15,718 according to the housing market report released by the Greater Rochester Association of REALTORS® (GRAR).

The GRAR report also showed 13,601 closed sales in 2022, which was the lowest since 2014 when there were 13,134 closed sales.

In addition to multifamily and industrial, both Vita and Shisler feel there are opportunities in other sectors as well, but developers will need to be selective and innovative.

Shisler is seeing companies “getting creative on redevelopment projects,” especially in the retail space. She sees more retail operations changing their footprints and keeping more products on hand. This is due to supply chain issues and changes in shopping preferences brought on by the pandemic such as increased use of retail delivery and pickup services like Instacart.

The Rochester retail vacancy rate for year-end 2022 was 8.9% per the CBRE report, which notes a rebound in brick-and-mortar retail sales in 2022 that is expected to continue in 2023. The report also notes a trend of reusing stand-alone or mall-based big-box retail sites, which “[has] a significant impact on both the retail property sector, as well as non-retail sectors.”

Key market developments in retail to look for in 2023 per the CBRE will be the opening of the Rochester area’s first Whole Foods Market in the town of Brighton and the completion of the University of Rochester Medical Center’s $227 million, 330,000 square foot orthopedic and physical performance center at Marketplace Mall.


John McDonald, vice president, senior commercial real estate relationship manager for Genesee Regional Bank, adds flex space as another segment to watch closely in 2023 and the years ahead.

The sector had a 14% vacancy rate for year-end 2022, up slightly from 2021. The flex market has had a notable impact on the traditional office and industrial markets, per the CBRE, which explains “flex product currently built out for office use will continue to feel the impact of post-pandemic uncertainty in how office occupiers will utilize space going forward.”

New flex spaces were limited in 2022, but the CBRE points to site work underway at Ontario Gateway Business Park in the Town of Farmington as a key market development. The 140,000-square-foot project will include a mix of flex and retail.

“Because of the pandemic the office segment has had to adjust,” McDonald said. “Business owners and landlords are adjusting what their needs might be and that’s going to take a few years to figure out.”

Caurie Putnam is a Rochester-area freelance writer.

Cowork spaces are a growing model for office space

At desk one, you might find a startup entrepreneur.

Over at desk two is a self-employed person who worked from home until the lack of human interaction got to him.

Then at desk three is the employee of a large company located far away. She needed office amenities without the cost and hassle of establishing a satellite office.

And in a communal space in the same office, there could be some people who dropped by just this once because they wanted a professional setting to host a business meeting.

A growing number of cowork offices–settings that provide office spaces and services on a temporary basis–are meeting the needs of all these people. They offer a desk, phone, Wi-Fi and a bottomless coffee pot, and even a mailing address for a brand-new company that doesn’t have a physical location yet.

Whatever the level of service in a cowork business, a wave of providers is creating them, from municipalities to entrepreneurs to established real estate companies.  Two market leaders, WeWork and Regus, have hundreds of locations across the United States. Regus recently established an outpost in downtown Rochester.

Reporting from a commercial real estate conference in the fall, Ken Ashley, executive director of commercial real estate provider Cushman & Wakefield, said experts there predicted 25 percent of the office space market will be in cowork use in just five years. One reason? A company can more easily upsize or downsize its resources when it doesn’t have to renegotiate a lease (so old school) or buy a building (even older school).

Other predictions are more conservative. Commercial real estate magnate CBRE has announced its plans to get into the cowork business, too, offering its prediction that 10 percent of the office space market could be devoted cowork in a decade. Angelo Nole, managing director of the CBRE Rochester office, said the company has not yet rolled out the particulars for its regional offices, such as the one in Rochester.

Meanwhile, others are entering the market locally.

The facade of Metro CoWork on East Avenue. (Provided photo)
The facade of Metro CoWork on East Avenue. (Provided photo)

In November, local real estate developer Craig Webster of Webster Properties opened Metro CoWork at 350 East Ave., providing memberships in an office where you grab any available desk, have an assigned desk, or use a private office, depending on your price point.  Metro Cowork is just one part of a mixed use scheme for the building in the middle of the city’s arts and entertainment district.

Since Webster opened the business, he’s introduced other locations at High Falls, Brighton and Irondequoit.  His fifth cowork office is due to open this summer in the town of Webster.

Cowork settings take the burden of setting up an office off the shoulders of a worker or company. “You don’t have to turn on Time Warner, figure out the phone situation,” Webster said. “We have copiers. An added value is if you want to network.  Or if someone wants to have someone have a passing conversation at the watercooler.”

Nole praised Webster for the way he delivered on the cowork concept. “In our opinion, they did a nice job in capturing for Rochester some of the things we’re seeing in the larger cities.”

Webster said, “It’s more than plopping some desks and chairs in a room and making it cheap. That’s not really what people want. You’ve got to kind of have all those components and you’ve got to do them really well.”

Earlier efforts to colonize downtown with cowork options failed, he said, because they didn’t understand that people want more than an inexpensive place to land a laptop. They also want a community.

Maureen Ballatori is an old hand at coworking. Her 29 Design Studio was an original tenant of Port 100 at 100 Castle St., in Geneva. It started in 2016 with support from the city of Geneva. Now she also manages the place and also has another membership at Made on State, a shared space for artists north of downtown Rochester.

She has noticed members of a cowork begin to depend on each other, much as co-workers in a traditional office might. Several at Port 100 have been there since the space opened in 2016, forming a tight-knit community.

“It’s nice to have the guy sitting next to me who is a software expert. ‘Hey, do you know how to do this?’ You’ve got a resource right next to you,” Ballatori said.

Cowork participants can also ask each other for advice, such as “Should I start looking for another job?” without worrying about whether it will get around to the boss.

“There’s no conflict because everybody works for other companies,” Ballatori said. “You’re saying it to a neutral party who can truly give you good advice.”

Cowork members also tend to help each other solve problems, she said. When Real Eats used space at Port 100 before the meal preparation service had a kitchen in Geneva, the interim marketing manager was looking for a chef to make the concept fly. Ballatori happened to have one in the family and now her husband is running the kitchen at Real Eats.

An interior view of the Port 100 coworking space in Geneva.  (Provided photo)
An interior view of the Port 100 coworking space in Geneva. (Provided photo)

After three years of municipal support, the city of Geneva wants Port 100 to stand on its own. To do that successfully, Ballatori said, the business needs to fill six of its 12 desks with full-time members and perhaps gain sponsorships for the public events it holds at the space.

Ballatori said Port 100, one of the few cowork businesses in the Finger Lakes outside of Rochester and Ithaca, may be suffering from lack of awareness on the part of what she calls “digital nomads.”  These workers may still be finding it novel to work from home in their pajamas. They haven’t yet realized yet, she said, that a cowork situation could be the best of both worlds–working remotely and still having access to services and comrades.

To get the word out, Port 100 is lining up a series of workshops to draw in potential members. It also offers occasional open cowork days when people can try it for free.

“When we find the right people, who find this resource and start working here, they almost always stick around,” Ballatori said.

Most cowork spaces offer programming open to members and the public. There might be a seminar on using social networking, for instance, or outside groups may be invited to hold a networking event at the cowork.

“As we grow, we want to bring the rest of the community together in different ways,” Webster said.

Cowork businesses include a wide range of physical options, with some offering a full array and others sticking to one or two membership models. They might have a drop-in membership allowing several visits to work at an open desk for $50. Or they could have private offices renting for several hundred dollars a month.

Those with multiple locations have memberships that allow members to use whatever office they need at the time, much like a network of libraries or YMCA branches.

Webster predicted the cowork market will evolve in two directions. Owners of multiple locations will start to dominate, including the out-of-town giants.

“In 5 to 10 years you’re going to see the single entities kind of fall away,” he said.

Secondly, some cowork operations will become specialized, such as his Made on State for artists. Some could be for women only, for lawyers or tech workers, he said.

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