December 10, 2025

Hey, it's Khem, tracking what moves markets in Greater Rochester.

and here is the new video just got published this week. Everything New and COMING SOON to Rochester New York In 2026!

In today's newsletter:

UNIVERSITY OF ROCHESTER LAUNCHES EXTENDED REALITY CENTER UNDER META/IMAX VETERAN

UR establishes Center for Extended Reality (CXR) led by Barry Silverstein (former Meta Reality Labs/IMAX senior director) targeting augmented reality, virtual reality, and artificial intelligence breakthroughs through transdisciplinary collaboration across optics, neuroscience, engineering, medicine, music, and humanities under Boundless Possibility 2030 strategic plan, while Silverstein envisions Rochester becoming "next home for major tech company - think Google, Meta or Microsoft" citing regional government-academia-industry partnerships, optics/manufacturing legacy, and skilled workforce. [RBJ]

Leadership Credentials:

CXR Founding Team:

Strategic Vision:

Commercialization Pathway:
CXR designed as "convening force and innovation engine" fostering partnerships across academia, industry, and government while leveraging Rochester's optics legacy (Kodak, Bausch + Lomb historical dominance) and existing research infrastructure supporting technology transfer from laboratory to market applications.

Regional Tech Ecosystem Potential:
Silverstein arguing Rochester possesses necessary elements for major tech company emergence: "You can't say that won't happen in Rochester... The region already has strong government, academia and private-sector partnerships, a legacy in manufacturing and optics and a skilled workforce. I'm not saying it's easy, but it's not impossible."

Why It's Strategic:
The CXR launch - under Silverstein's Meta/IMAX pedigree - represents institutional bet that Rochester's optics heritage (Kodak's century-long dominance, UR's Institute of Optics reputation) creates competitive advantage in AR/VR development where display quality, optical physics, and photonics expertise determine product success versus software-focused Silicon Valley competitors. Silverstein's 28-year Kodak tenure followed by IMAX laser projection breakthrough (Academy Award recognition) and Meta Reality Labs leadership demonstrates rare combination of deep physics understanding and consumer product commercialization experience, while his emphasis on "customer in mind" research contrasts academic tendency toward publication-focused investigation divorced from market applications. The transdisciplinary team composition (optics physicist, neuroscientists, AI specialists, humanities scholars) addresses AR/VR's fundamental challenge where technical feasibility (resolution, field-of-view, latency) must align with human perception and social acceptance, while neuroscience integration (Tadin, Marcos, Suarez-Jimenez) enables optimization for biological visual systems rather than engineering specifications alone. The "AI as bridge" framing acknowledges that AR/VR hardware success depends on intelligent software interpreting user intent and environmental context where computer vision, natural language processing, and predictive algorithms transform passive displays into responsive assistants, while UR's recent $105M research funding milestone (previous week's data) suggests institutional capacity supporting multi-year development timelines required for hardware commercialization. Silverstein's "next Google/Meta/Microsoft" ambition - while audacious - reflects historical precedent where Rochester birthed Xerox PARC-level innovation (Kodak's digital imaging patents, though poorly commercialized) and retains engineering talent density (RIT/UR graduates, legacy Kodak/Xerox engineers) comparable to Boston/Austin second-tier tech hubs, while lower operating costs and available real estate support startup scaling impossible in San Francisco/Seattle.

EXPERTS FORECAST CONTINUED SELLER DOMINANCE WITH 75% APPRECIATION SINCE 2019

Greater Rochester Association of REALTORS President Don Simonetti Jr. and Elysian Homes CEO Mark Siwiec project 2026 seller's market continuation with persistent bidding wars and property value increases following 75% cumulative appreciation since 2019, while mortgage rate stabilization around 6.23% (down from 7.26% January peak) and Rochester's limited pandemic overbuilding position local market outperforming national record-low transfer rates (28 per 1,000 homes) as 80% of U.S. homeowners hold sub-4% mortgages creating "locked-in" effect. [RBJ]

Market Fundamentals:

Price Appreciation Context:

National Comparison:

Mortgage Rate Environment:

Rochester Competitive Advantages:

Winter Market Opportunity:
Simonetti advising buyers to maintain market engagement through December-February where sellers listing in "dead of winter" demonstrate motivation beyond speculation, creating negotiation opportunities versus spring bidding war intensity.

Technology Integration:
Siwiec predicting increased AI adoption in real estate process where "forward-thinking agents who have figured out how to harness AI on behalf of consumers" gain competitive advantage through automated property searches, market analysis, and enhanced client communication, while Elysian Homes emphasizing professional mentorship combined with creative services (videography, drone photography, marketing) differentiating from commodity brokerage models.

Why It's Critical:
The 75% appreciation since 2019 - outpacing national trends - demonstrates Rochester benefiting from structural supply shortage (minimal pandemic construction) and demographic inflows (remote workers, cost-arbitrage relocations) while avoiding Sunbelt's speculative overbuilding creating current inventory gluts (Phoenix, Austin, Boise price corrections). The national transfer rate collapse (28 per 1,000 homes in 2025 versus historical 35-40 range) reflects mortgage rate lock-in phenomenon where 80% of homeowners rationally avoid trading 3-3.5% loans for 6%+ rates even when life circumstances (job changes, family size, downsizing) would otherwise trigger moves, while this artificial supply constraint persists until rates approach 4% again (unlikely until 2027+) or economic shocks force distressed sales. Rochester's estimated 30-33 first-time buyer age - significantly younger than 40-year national average - reflects relative affordability advantage where median home prices ($250K-$275K range estimated) remain accessible to young professionals despite 6%+ rates, while coastal markets (Boston $750K, San Francisco $1.3M medians) price out first-time buyers entirely creating rental-class permanence. The spring season acceleration (now starting January versus historical March) reflects competitive intensity where buyers enter market earlier seeking inventory advantage before peak competition, while this timing shift requires sellers listing December-January capturing motivated early buyers willing to pay premiums for limited winter inventory. Simonetti's first-half strength prediction acknowledges political uncertainty where November 2026 midterm elections create consumer hesitation affecting major financial decisions regardless of policy positions, while historical patterns show transaction volume declining pre-election periods as uncertainty itself drives delay. The AI integration emphasis reflects technology disruption where generative AI enables automated property matching, comparative market analysis, and document preparation potentially commoditizing agent services unless professionals differentiate through relationship management and negotiation expertise augmented by rather than replaced by technology, while Elysian Homes' one-year success (mentioned by Siwiec) validates premium service model combining human expertise with technological leverage.

EXCELSIOR COMMUNITIES CONVERTS COLUMBUS BUILDING ADDING 30 DOWNTOWN APARTMENTS

Real estate investment firm plans $7.9M renovation converting three commercial floors to residential units increasing Columbus Building occupancy from 101 to 131 apartments while renovating lobby/hallways and reopening fitness club, seeking $344K COMIDA tax exemptions bridging funding gap as 1929-era building's commercial vacancy elimination demonstrates continued downtown residential demand following September 2025 acquisition from Syracuse-based Trason Global Realty with 88 on Elm and Terminal Building. [RBJ]

Project Specifications:

Building Profile:

Ownership Structure:

Economic Justification:
Excelsior characterizing "age and prior use" making "conversion and modernization particularly costly" while commercial vacancy elimination will "breathe new life into historic structure, helping strengthen Center City neighborhood revitalization while providing much-needed quality housing in prime downtown location."

Why It Matters:
The Columbus Building conversion - adding 30 units through commercial-to-residential transformation - demonstrates continued downtown housing demand outstripping available inventory where developers justify $7.9M capital deployment converting 96-year-old Class B office space rather than constructing ground-up projects requiring higher per-unit costs. Excelsior Communities' September 2025 acquisition of three downtown properties (Columbus, 88 on Elm, Terminal Building) from Syracuse-based Trason signals institutional confidence in Rochester urban core where out-of-state capital identifies undervalued assets with conversion potential, while 3,000-unit local portfolio provides property management scale efficiencies absorbing marginal operating costs and enabling bulk purchasing/maintenance contracting. The COMIDA tax exemption request ($344K) represents 4.3% of total project cost suggesting modest public subsidy requirement where private capital carries 95.7% of financial risk, while Excelsior's "funding gap" language indicates renovation economics require incentives achieving market-rate rent levels covering debt service and operating expenses given age-related challenges (outdated mechanical systems, asbestos abatement, accessibility compliance). The commercial vacancy elimination addresses downtown's fundamental post-pandemic challenge where remote work adoption created structural office space oversupply reducing demand for traditional Class B/C spaces while residential conversion creates taxpaying residents supporting street-level retail and restaurant ecosystem dependent on pedestrian traffic and after-hours activity. The fitness club reopening and lobby renovation demonstrate amenity competition where downtown apartments compete with suburban complexes offering resort-style facilities (pools, fitness centers, clubhouses), while historic building character (1929 construction, architectural details) provides differentiation appealing to urban-lifestyle preferences valuing walkability, architectural heritage, and cultural amenities unavailable in suburban garden apartment environments.

SPECTRUM-COUNTY PARTNERSHIP COMPLETES $2.7M BROADBAND EXPANSION ACROSS TEN TOWNS

Monroe County and Spectrum finish fiber broadband buildout investing $2.7M ($1.8M ARPA federal dollars, $956K private capital) eliminating digital divide affecting rural businesses and homes across Clarkson, Hamlin, Mendon, Ogden, Parma, Penfield, Riga, Rush, Sweden, and Wheatland, enabling agricultural enterprises like Coyle's Pumpkin Ranch (Mumford) to process e-commerce payments and compete in modern retail environment where previous connectivity inadequacy "lost some sales" as customers unable to complete mobile payment transactions. [RBJ]

Investment Structure:

Coverage Area (10 Towns):

Business Impact Example:

Strategic Partnership Rationale:
2023 Magellan Advisors study identifying "significant service gaps in low-income and rural areas" recommending county form private provider partnerships accelerating buildout where public funding leverages private capital achieving faster deployment than government-only approaches, while Spectrum's nationwide scale and U.S.-based workforce enabling "multiple towns parallel" construction unavailable from smaller regional providers.

Regional Economic Impact:
Spectrum Regional VP Lara Pritchard characterizing rural areas as "may not be affluent suburban neighborhoods but their need for connectivity is no less than anyone else... It's hard to operate without connectivity," while Wheatland Supervisor Jim Kirch crediting "Spectrum's scale, fiber backbone and field resources allow entire regions to come online in parallel."

Why It's Strategic:
The $2.7M broadband investment—leveraging ARPA federal pandemic recovery funds—demonstrates infrastructure priorities where digital connectivity now considered essential utility comparable to water/sewer rather than luxury amenity, while rural business impacts (Coyle's lost sales) illustrate economic costs of broadband absence beyond residential convenience affecting agricultural enterprises increasingly dependent on e-commerce, social media marketing, and digital payment processing. The public-private partnership model ($1.8M public, $956K private) achieves 65%-35% cost split where government funding incentivizes private capital deployment in low-density areas failing traditional return-on-investment thresholds given high per-mile buildout costs versus limited subscriber density, while Spectrum gains long-term subscription revenue (likely $80-$120/month per customer) justifying upfront infrastructure investment amortized over decades. The ten-town coverage (Clarkson through Wheatland) targets Monroe County's southwestern/northwestern rural periphery where population density below 100 persons per square mile makes market-rate buildout economically unfeasible without subsidy, while agricultural and small business concentration creates disproportionate economic impact per capita compared to residential-only connectivity given farm operations' dependence on weather data, commodity pricing, equipment diagnostics, and direct-to-consumer sales channels. Coyle's Pumpkin Ranch example demonstrates retail evolution where mobile payment adoption (Venmo, Apple Pay, contactless cards) requires merchant broadband connectivity enabling real-time transaction processing and payment gateway communication, while previous dial-up or satellite limitations forced cash-only operations alienating younger customers expecting digital payment options. The ARPA funding utilization aligns with federal pandemic recovery goals where remote work, distance learning, and e-commerce acceleration during COVID exposed digital divide consequences affecting rural residents' economic participation, while infrastructure investment creates construction jobs (Spectrum technicians, contractors) and enables business activity generating tax revenue offsetting initial public expenditure through long-term economic multiplier effects.

Homeowners: UR's Extended Reality Center launch - under former Meta/IMAX leadership - strengthens regional knowledge economy foundation supporting property values through high-wage job creation and innovation ecosystem development, while 75% appreciation since 2019 represents substantial equity gains with expert forecasts suggesting continued value increases through 2026 despite elevated mortgage rates constraining turnover velocity.

Home Buyers: January spring market start requires immediate preparation rather than waiting for traditional March surge, while working with AI-enabled experienced agents becomes critical in continued bidding war environment where technological leverage accelerates property identification and offer preparation. Rochester's relative affordability and limited overbuilding position local market as opportunity versus stagnant national environment, while mortgage rate stabilization (6.23% from 7.26% peak) provides modest payment relief though lock-in effect constrains inventory availability.

Investors: Columbus Building's $7.9M conversion adding 30 downtown units validates continued residential demand supporting additional commercial-to-residential transformation opportunities where aging Class B/C office inventory presents acquisition targets, while Excelsior Communities' three-property downtown acquisition demonstrates institutional capital confidence in Rochester urban core. UR's CXR launch creates potential spin-out startup ecosystem where university AR/VR commercialization generates early-stage investment opportunities leveraging regional optics heritage, while broadband expansion enables rural property development and agricultural business operations previously constrained by digital divide affecting e-commerce participation and payment processing capabilities.

Bottom Line: This week demonstrates Greater Rochester executing knowledge economy pivot where university research commercialization (Extended Reality Center) leverages historical strengths (optics legacy, engineering talent density, lower operating costs) creating foundation for high-value company emergence, while housing market fundamentals (persistent supply shortage, limited overbuilding, demographic inflows) position region defying national stagnation through structural advantages rather than speculative dynamics. The coordinated infrastructure investment (broadband expansion, downtown residential conversion) removes legacy constraints enabling economic participation across rural-urban spectrum while demonstrated institutional confidence (Excelsior's downtown acquisitions, UR's CXR investment, Spectrum's private capital deployment) validates regional growth trajectory despite national uncertainty.

Ready to understand how UR's AR/VR commercialization affects nearby property values or evaluate downtown conversion opportunities as institutional capital accelerates urban residential transformation? Let's connect you with our partners who track university-driven development patterns and commercial-to-residential repositioning strategies.

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See you next week,

Khem