That is supposed to create an incentive for landlords to invest heavily in their properties, or risk losing their tenants.

“The flight to quality is something we’ve been monitoring for a few years now. You’ve seen it in other cities,” said Kyle Ciminelli, president of Ciminelli Real Estate Corp., citing New York City, where he worked in real estate before coming back to Buffalo. “It always comes to Buffalo later.”

Now he and others at the firm believe they’re seeing the concept in action in Buffalo, in places such as Larkinville and Seneca One tower, but also at 40-50 Fountain Plaza, which Ciminelli Real Estate owns.

“We’re an example of that, and I think there are a few others, as well,” Ciminelli said, “whether it’s this building or other Class A assets throughout the city that have spent the time and money adding common areas and upgrading amenities. All that work and time and effort and following the national trends of some of the other buildings in the country have really started to pay off.”

The two-building complex in downtown Buffalo was constructed in 1989, so it is certainly not new, and has had several owners since then. It is separate from the Bank of America Building at 10-12 Fountain Plaza, across the concourse.

Formerly called Key Center when it was home to KeyBank’s Western New York headquarters operations, it has long been an anchor component of the city’s central business district, and also previously housed Delaware North Cos. It includes a 17-story North Tower and a 13-story South Tower, with a two-story, 18,800-square-foot glass atrium between them, and more than 423,000 square feet of total space.

For many years, it was owned by Erwin Zafir’s New York City-based Key Success LLC, which bought it in 2000, and then invested millions of dollars in capital improvements, renovations and tenant enhancements.

Ciminelli had been the onsite property manager and leasing agent for the property since at least 1998. But the developer expanded its role when it decided in 2017 to move its offices from suburban Amherst to downtown Buffalo, at Fountain Plaza, and became a part-owner of the building, and eventually majority owner.

In 2018, the firm began a $4 million renovation, with a goal of livening the lobby and atrium, adding more glass to open the building to the street level and natural light, and adding new amenities to retain and attract new tenants. It took advantage of the Covid-19 pandemic by doing much of the work in the building “at a time when not many people were going through it,” Ciminelli said.

The renovation included a new lobby, a common gym with locker facilities for all tenants, a public art gallery that was unveiled in 2021, and a new location of the Gronkowski family’s NextGen Fitness that opened in 2021. There are also subsidized food services and its new Prova restaurant that even offers catering for tenants, such as for holiday parties.

In 2022, Ciminelli also introduced programming to the building, such as happy hours, live music on the patio, caricatures, after-hours yoga, markets and fitness classes in the lobby, a rotating art program and cocktail reception, and events both inside the lobby and on the plaza.

The effort paid off, he said. CannonDesign had already moved its headquarters from Grand Island to Fountain Plaza in 2020, but technology firm Odoo moved its regional headquarters from Seneca One tower in 2023, taking up most of 40 Fountain Plaza, while law firm Lippes Mathias expanded its space the year before.

And since the start of this year, Ciminelli has signed six leases totaling 31,000 square feet – five of them for new tenants and one for expansion, all at 50 Fountain Plaza. That increased total occupancy to 91%.

• Rochester law firm Woods Oviatt Gilman took 6,000 square feet on the third floor, moving from Class B space in Main Place Tower.

• Masiello Martucci & Hughes took 3,500 square feet on the sixth floor, relocating from a Class B building on Pearl Street.

• National accounting firm Cohen & Co. of New York City is occupying 9,200 square feet on the 9th floor, with their first office in Buffalo.

• Lippes is opening up a 4,000-square-foot conference center in the former Tim Hortons space in the lobby, while also extending its previous lease for 55,000 square feet on the 7th, 15th, 16th and 17th floors.

• Another national law firm with no local presence is leasing 5,000 square feet on the 6th floor, while a small spinoff accounting firm took the remaining 3,500 square feet on the 12th floor. Neither would let Ciminelli identify them.

That’s at the same time as commercial real estate brokerage CBRE Upstate New York says the city’s office market has been stable in the first half of the year, with local tenants opting for longer leases because of “clearer return-to-office mandates and a desire for better financial terms.” The firm cited four recent downtown office leases – but in four different buildings.

“These tenants are not relocating from B to B. They’re upgrading their image, to get their people back to the office. That allows them to flourish in this new environment we’re in,” Ciminelli said.

That’s why other building owners need to upgrade their own space, he added, but “I haven’t seen any reflection of it yet.”

“There’s still a lot of Class B and Class C space throughout downtown with no significant plan. You either have to upgrade these buildings to attract tenants or convert it to a different use,” he said. “Our suburban portfolio is seeing very similar trends to what we see downtown. The Class B stuff is sleepy.”

THE LATEST

Taylor Gahagen, husband of tennis star Jessica Pegula’s husband, has formed a private-equity firm.

The Diamond Lofts project on Main Street is moving forward for city approval.

Samuel Savarino has resumed construction on the Ellicott Station project in downtown Batavia.

The parent of the pet food company that operates the Milk-Bone dog-biscuit plant on Buffalo’s East Side has kicked off construction on a $52.7 million renovation.

Wegmans Food Markets has teamed up with star Buffalo Bills quarterback Josh Allen for another breakfast collaboration. 

The Buffalo Sabres have installed a multimillion-dollar audio system in KeyBank Center.

The hulking DL&W train terminal behind KeyBank Center will soon be back in business.

There is more evidence that the Buffalo Niagara housing market is scorching hot.

Moog Inc. last week formally opened a $6 million operations training center in Elma.

The Buffalo Bills have raised more than $200 million through the sale of personal seat licenses at the new stadium, and that total will keep rising.

The plan by BOCES to consolidate its operations in the former HSBC complex in Depew received tax breaks.

2024 was a record-setting year for tourism in the Buffalo Niagara region. But 2025 won’t come close.

The Buffalo Niagara Medical Campus is suing again to try to block the expansion of the McCarley Gardens affordable housing complex.

A Canisius-Syracuse exhibition basketball game is the latest in the efforts to bring more events to the KeyBank Center.

The Hamburg Industrial Development Agency is clawing back tax breaks for a fire truck manufacturing firm.

Buffalo Bills Hall of Famer Thurman Thomas says he and his construction firm have learned a lot by working on the new stadium.

The Buffalo Next team gives you the big picture on the region’s economic revitalization. Email tips to buffalonext@buffnews.com or reach Buffalo Next Editor David Robinson at 716-849-4435.