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ochester's commercial real estate market remains strong, driven by a robust industrial and multifamily sector. Lenders are optimistic about the local industry, with ESL Federal Credit Union expanding its real estate team to meet growing demand.

    According to Jon Fogle, manager of ESL's commercial banking division, Rochester has experienced developers who are poised for another busy year. Despite challenges in 2023 and 2024, including tariff threats and supply chain disruptions, lenders see positive indicators for development.

    Interest rates will play a role in how developers proceed, with many waiting for the right moment to move forward on projects. John Klatte, senior vice president of commercial lending at NexTier Bank, notes that there is pent-up demand and deal volume, particularly in the $2 million and under range.

    The office sector remains uncertain due to work-from-home models and lease maturities. However, lenders see opportunities for repurposing projects, especially in Class B or below buildings that are no longer attractive to tenants.

    Banks have adjusted their lending practices, shifting from debt service coverage ratios to cash flow coverage and lower loan-to-value ratios. Borrowers are also taking on more risk, expecting rates to decrease in the coming years.

    In contrast, the residential market is experiencing a shortage of single-family homes, with demand outpacing supply by 75%. Christopher Thomas, founder/broker at New 2 U Homes, advises investors to take advantage of this opportunity and build or purchase properties, as prices are likely to increase significantly in the near future.