Cheektowaga, N.Y. (WBEN) - Why would a California real estate investment group buy a Cheektowaga warehouse, paying 108% more than the property sold for one year ago?
The short answer is: The deal serves as a snapshot and telltale sign of how out-of-town investment groups view the region's commercial real estate landscape. They love our real estate.
In the case of the Cheektowaga property - located on Broadway - Amherst-based Iskalo Development Co. paid $1.75 million for the 24,000-square-foot warehouse in mid-2024.
Iskalo renovated the vacant warehouse and landing HVAC specialists, Reimer, as the building's sole tenant. Reimer, by the way, remains in the building under the terms of a long-term lease.
The property piqued the interest of an investment group connected to Torrence, Calif.-headquartered the Tuffi Co., who paid $3.64 million for the property. The deal is Tuffi's first in the Buffalo-Niagara market.
The deal is the latest in a series of commercial transactions where out-of-town investment groups are looking to middle American markets like Buffalo.
"The bigger markets are too expensive," said Robert Schell, Pyramid Brokerage Co. of Buffalo president. "There are more deals in middle markets."
Schell also credits lower interest rates that are sparking some of these deals.
"Cash is king," Schell said. "With lower [interest] rates, there is a lot of money coming off the sidelines."