ALBANY-Move over, California. New York’s Capital Region is emerging as the Silicon Valley of the East. After Governor Andrew M. Cuomo announced that the state will welcome five companies to create the next generation of computer chip technology, the Capital Region will soon become home to 6,900 new jobs.
This $4.4-billion agreement between the state and private investment comes at a time when New York’s nanotechnology sector is just heating up--and industry leaders predict that these developments will positively affect commercial real estate. “The good news is that there is a tremendous surge in the technology world and jobs coming in,” Richard Sleasman, managing director at CB Richard Ellis’ Albany office, told Real Estate Forum in June 2011. Albany was named by Forum editors as one of the nation’s top 10 emerging markets to watch.
Now with Intel, IBM, GLOBALFOUNDRIES, TSMC and Samsung set to develop office space and research labs in Albany, Canandaigua, Utica, East Fishkill and Yorktown Heights, each firm will focus on creating the next two generations of computer chips to power computers, electronic devices and national security applications.
These developments should bode well for commercial real estate, industry data shows. According to 2010 industrial data from CBRE’s Albany office, the Capital Region industrial market continues to show it has stabilized, as vacancy rates for the past three quarters have dropped, from a high of 10.9% in Q4 2009 to 10.3% in Q4 2010.
That velocity is quickening in 2011. Construction is underway on Global Foundries’ one-million-square-foot chip manufacturing plan project in Malta, NY, which has caused demand for warehouse/light manufacturing space by ancillary vendors to increase in the second half, CBRE says. Upon completion in 2013, the complex will employ over 1,500 people. “This unique mix of industry and technology partners located in New York is a key component of our strategy of expanding our local operations,” says Ajit Manocha, CEO of Global Foundries in a statement.
In addition, Intel separately agreed to establish its East Coast headquarters to support the overall project management in Albany. The facility will be devoted to the creation and manufacturing of 450-millimeter wafers, or semiconductors, which will produce more than twice the number of chips processed on today’s 300-millimeter wafers.
To support the project, the state will invest $400 million in the SUNY College for Nanoscale and Science Engineering in Albany, including $100 million for energy efficiency and low-cost energy allowances. “This new technology will reduce the cost of production, increase productivity for manufacturers and reduce our environmental footprint on a per chip basis,” says Paul Otellini, Intel’s president and CEO, in a statement.
The total initiative is part of the state’s “Made in NY” efforts to create, attract and retain manufacturers and suppliers here. But New York’s high-tech roots go back to Governor George Pataki’s administration, who launched “Tech Valley New York,” an online program connecting 19 counties statewide with information about high-tech jobs, research and development and other incentives.
These long-term efforts have led to job retention. According to August 2011 data from the Capital District Regional Planning Commission, the Capital District has a 6.6% unemployment rate, compared to New York State at 7.7% and the US as a whole at 9.1%. “This is exactly what we in the New York State Assembly envisioned 15 years ago,” says Assembly Speaker Sheldon Silver, in a statement.
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