Glens Falls Business Journal photo
By Susan Elise Campbell
The buying and selling of commercial buildings and properties in the North Country took a toll during the Covid pandemic, but two local real estate professionals describe the current outlook as “bullish” and “optimistic.” Respectively, these are Bob Sears of Berkshire Hathaway Home Services and Mark Levack of Levack Real Estate, LLC, each having more than the 35 years in brokering commercial real estate in and around Glens Falls and Queensbury.
“There is money in the system for people who have a history of developing properties,” said Sears. “The increase in interest rates put a little damper on things, but in general, the banks are willing to lend for projects that are worthwhile.”
Commercial projects are “anything beyond a four-family unit” and include apartments, office spaces, retail stores, medical buildings, malls, mobile home parks, commercially zoned lots, investment income real estate, and more, said Levack. At any given time, there is more activity or growth in some categories than others in this cyclical market, he said.
Trending are mixed use developments with both retail office space and three or four stories of apartments to occupy, Sears said.
“Most of the mixed use projects in the region are one building with up to 10,000 square feet to lease,” he said. “There are enough entrepreneurs in the area that they tend to fill up the offices and retail space.”
Apartment occupancy in Glens Falls runs 90 to 95 percent, Sears said. As video conferencing services and new technologies opened up remote working opportunities during the pandemic, he said many gravitated from New York City, Westchester County, New Jersey and other southern parts during the pandemic to work from home and commute occasionally.
“Economically it makes sense to move here and pay 30 to 50 percent less for a house than where they live now,” said Sears. “To a degree, commercial sales and construction depend on the amount of people coming into the area.”
“There is no net growth based on the EDC demographic statistics,” said Levack.
“We are holding our own when compared to our more affluent neighbors, Saratoga to the south and Lake George to the north,” he said. “But those areas help support tourism, which makes up a quarter of our local economy.”
The opportunities for commercial development are restricted by the Adirondack Park and by the zoning in place, Sears said. To give a perspective, he said that if all commercial properties in Queensbury, Glens Falls and South Glens Falls between Northway exits 18 and 19 from the Hudson River up to Aviation Road could be put onto Central Avenue in Albany, there would still be room to expand on Central Ave.
“I’m not saying we need more commercial zoning,” Sears said. “The area is a bedroom community zoned for residential, as it should be.”
With little inventory, Sears and Levack said developers need to “think outside the box” and repurpose empty office and manufacturing buildings.
The location that is now Harbor Freight was a supply store that Sears sold a few years ago. A pizza shop sitting on three-quarters of an acre is now a tire shop. Levack brokered a lumber yard years back that became the home of Angio Dynamics.
Now many of the paper plants, medical offices, and medical device manufacturers that created jobs for the region and spurred the economy are shuttering or moving out. Once bustling buildings are no longer full, Levack said.
“With an aging population and retiring medical practitioners, health care delivery is becoming more institutional and so the market for medical office space is softening,” said Levack. “Private practitioners cannot compete and are being absorbed into the large medical networks, leaving their special use facility for rent or purchase.”
Even the 54,000 square feet in the many-storied 333 Glen Street building recently vacated by Travelers and Hudson Headwater could be converted to general offices, services, or even residences, he said.
“When workers leave a building to work from home, office space and all commercial real estate becomes devalued across the board,” Levack said.
In turn, this leaves the building owners not only looking for tenants but also for property and school tax relief, because their income does not support their current assessment, he said.
“The biggest concern I have for the region is loss of jobs,” Levack said.
“Manufacturing offers clean, high paying jobs and to see that trend going the other way is going to have the most impact on the local economy,” he said.
Levack and Sears said the high costs of doing business and specifically high corporate tax rates in New York are not conducive to bringing back any of those jobs.
“New York is consistently ranked in the top five most expensive states, but we can take creative steps at the lowest level in government to reverse that trend,” said Levack.
He said third ward councilwoman Diana Palmer has secured a $175,000 grant to create a comprehensive plan to address the buildings and codes and outdated zoning in the region.
“By retooling our commercial codes we can foster future growth and development,” said Levack. “I believe that through proper urban planning we can increase the tax base and help offset the cost of doing business.”
Sears said communities can consider ways to improve the infrastructure to entice new business.
“What we need is smart growth, which is understanding what we have and how to collaborate with surrounding municipalities to streamline growth and eliminate some of the layers of taxation,” said Sears.
“There are 12 municipalities surrounding where I am right now and that’s a lot of layering of governments and taxes,” said Sears. “Collaboration to eliminate redundancy is the best way to think outside the box right now to create a better environment both residentially and commercially.”
“The Town of Lake George and the Village of Lake George are a prime example of combining their municipal government functions,” said Sears. “You don’t need each community to have its own assessor or police department. They can also collaborate county-wide.”
While New York has a challenge to stem the tide of out-migration, Levack said “the good news is, we live in a beautiful part of the world with clean water, clean air, low crime.”
“But we have been a little out of balance and need to attract wealth,” he said.
“This region is the gateway to the Adirondacks and yet is within three and a half hours of New York City, Boston and Montreal,” said Sears.
“The Glens Falls and Queensbury area is a great place to raise a family, a great place to create jobs, and a great place to get ideas,” he said.