Growth Markets for 2015: Upstate New York

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Secondary Cities in the South and Northwest Grab the Headlines, But Upstate New York is Beginning to be Recognized for Stable Recovery and Urban Reinvention

As the United States real estate market inches towards recovery, low interest rates and high prices are keeping many investors out of the big cities. A good number of industry experts agree that the current climate is ripe for investment in secondary markets where property is less expensive, yields are higher and potential for growth uncapped. However, secondary markets can be more susceptible to market fluctuations and industry change. Savvy investors who pay close attention to economic trends can mitigate these risks and reap rewards in the long term. While secondary cities in the South and Northwest have attracted a good deal of headline attention, upstate New York is beginning to be recognized for stable recovery and urban reinvention.

When upstate New York’s Erie Canal was built, opponents, of which there were many, nicknamed the project “Clinton’s Ditch” for then New York Governor DeWitt Clinton. The project was massive, expensive and required feats of engineering that were considered almost impossible at the time. But, utilizing the period’s most advanced engineering technology, the Canal was successfully completed and ultimately became the nation’s most effective way of moving goods west. The Canal created jobs, industry, wealth and a giant population serge along its corridor. The cities of Albany, Syracuse, Buffalo and Rochester saw major building projects including an impressive network of public and private colleges and universities. (Today, New York State boasts 307 colleges and universities – more than any state aside from California.)  In the 20th century, modern highways opened the country to the movement of goods outside of waterways, and upstate New York experienced significant economic loss. As jobs moved south, the population dwindled and property values stagnated.

Today, technology is again sparking economic growth along the cities of the Canal. In 2004, the SUNY College of Nanoscale Science and Engineering (CNSE) was founded in Albany. CNSE served as the foundation of economic resurgence for the Albany area attracting other major players in the nanoscale industry including GlobalFoundries who built a major chip manufacturing plant just north of Albany. Building upon their tremendous success with attracting partners and investors, CNSE expanded to other State University locations in Buffalo and Rochester, and is currently building a location in Syracuse. In March 2014, CNSE merged with Utica’s SUNY Institute of Technology to form SUNY Polytechnic Institute. SUNY Polytechnic will serve to maximize SUNY resources and further position upstate New York as a technology hub.

Players in other high tech industries–most notably, green technology and healthcare–followed the nanotech migration to upstate New York where they can be close to centers of higher learning for recruitment and research purposes. The cities of upstate New York rank within the nation’s top innovators: a 2010 TechAmerica Foundation report ranked Albany as “the third fastest growing high-tech job market in the country”; the Brookings institute ranked Rochester 13th out of the most innovative cities in the U.S. in 2013. Albany, Syracuse, Buffalo and Rochester were all among cities ranked by Forbes as the “Best Places for Business and Careers.”