Upstate New York Brokers Push Back on Investor Tax Objections

Written by:

Rudi Davis

Date:

29 Mar 2026

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Mercedes Brien, president of the New York State Commercial Association of Realtors and a commercial broker with Yaman Commercial, says out-of-state investors regularly pass on upstate New York commercial real estate because of the state’s reputation for high taxes, often without understanding what those taxes fund or how they support the fundamentals that make properties viable.

Brien, who has worked in Rochester, New York, commercial real estate for 30 years, says taxes are a reflexive objection for national buyers evaluating regional opportunities. Investors typically compare New York’s tax structure to that of lower-tax states but overlook the infrastructure, services, and quality of life those taxes support.

“There’s always the question of taxes in New York,” Brien says. “We are highly taxed, but we get a heck of a lot for our taxes.”

This perception gap is a persistent challenge for regional brokers. Brien argues that the problem is less about the absolute tax burden and more about the failure to reframe the conversation around what investors receive in return.

Taxes Fund Roads and Services

One of the most overlooked benefits, Brien says, is consistent snow removal and road maintenance, services that directly affect property operations and tenant experience. Upstate New York receives heavy snowfall each winter, requiring municipalities to invest in plow fleets, salt reserves, and maintenance crews to keep roads usable.

“We pay our taxes, and our taxes are hefty, but they’re going to take care of our roads and fill the potholes in the spring. There’s a lot we get for our money,” Brien says.

For commercial property owners, reliable road maintenance is essential year-round. Road conditions affect deliveries, employee commutes, and customer access. In many lower-tax states, cities and towns lack the resources to maintain roads to the same standard, resulting in operational costs that outweigh the tax savings.

Out-of-state investors rarely factor these operational realities into their underwriting. Investors focus on the tax line in a pro forma and compare it to a lower-tax state, without asking what services are included or what additional costs they may face in areas with fewer public resources.

The complexity of New York’s tax system compounds the confusion. State, county, and municipal taxes vary widely across the state. Investors unfamiliar with this structure may see a total tax rate and assume it applies statewide, when in fact both taxes and service levels differ significantly between regions.

Upstate Differs from New York City

Many out-of-state investors mistakenly assume that upstate New York operates like New York City, applying the same expectations around costs and deal structure statewide. In reality, regional markets such as Rochester, Buffalo, and Syracuse, New York, have different economic models and industry practices.

“Our out-of-town investors view things in a different way than the rest of the state does when it comes to commercial real estate,” Brien says.

In New York City, commercial real estate deals often involve direct negotiations between landlords and tenants, with brokers playing a more limited role. In upstate New York markets, brokers for both landlords and tenants work together to facilitate deals and maintain professional relationships that keep transactions running smoothly.

“The New York City market is tenancy of owner and tenant speaking initially, even the brokers in the room, but the owner and the tenant are negotiating the deal directly, versus going through people,” Brien says. “There’s a big difference there.”

When investors expect upstate New York markets to function like New York City, they risk misunderstanding how deals are structured, how relationships are managed, and what level of service to expect from local brokers.

Upstate New York Market Stability

The tax conversation also needs to address market stability. Rochester, New York’s commercial real estate market has historically weathered downturns, including the 2008 financial crisis and the post-September 11 slowdown, with less volatility than many other regions. Brien credits this resilience to the region’s conservative approach and robust public infrastructure.

“In 2008, and back at 9/11 times, we held our own,” Brien says. “Yes, it was slower, but it was not to the point where, oh my gosh, how am I going to feed my family?”

For investors seeking stable long-term returns, market resilience can outweigh nominal tax savings. Regional brokers have struggled to communicate that value proposition to national investors.

Out-of-state investors often dismiss opportunities in upstate New York based solely on tax rates, without factoring in what those taxes fund or how they contribute to market fundamentals. Brien says regional brokers need to provide better context so investors can make informed decisions.

Reframing Upstate New York Taxes

At Yaman Commercial, Brien regularly works with out-of-state investors, and tax discussions are a recurring hurdle. Brien finds that investors are more receptive when the focus shifts from headline tax rates to total cost of ownership and operational needs.

When comparing a property in upstate New York to one in a lower-tax state, investors should also weigh the costs of road maintenance, snow removal, and workforce availability. In some cases, the total cost of ownership may be lower in New York despite higher taxes.

Brien also stresses the importance of local economic drivers. Rochester, New York’s economy is anchored by healthcare, education, and advanced manufacturing, with major employers including the University of Rochester, Rochester Regional Health, and a concentration of optics and photonics companies. These employers provide a steady demand for commercial space and support a skilled workforce.

“We have these three wonderful cities of Buffalo, Rochester, and Syracuse, all in a line,” Brien says. “This is what’s going to save our cities. We need to have those feet on the street to make that city alive.”

For investors willing to look beyond the tax headline, upstate New York offers strong fundamentals, stable demand, and infrastructure that supports long-term property performance. The communication gap remains a barrier, and regional brokers must do more to educate outside investors on what they are acquiring when they invest in upstate New York.

The debate over New York’s taxes is unlikely to disappear, but investors who analyze the full picture can find real value in upstate New York markets. As the national capital faces more competition and thinner margins elsewhere, understanding the true cost and benefit of higher taxes, including stable infrastructure, reliable services, and market resilience, may distinguish a sound long-term investment from a missed opportunity. For regional brokers, closing the communication gap is essential to attracting investors who can see past the tax line to the underlying value.