Big Apple Still #1 with Investors

According to Cushman & Wakefield’s annual Winning in Growth Cities report presented at EXPO Real this year, New York is still the crown jewel of commercial property investment on a global scale.
Janic Stanton, of Cushman & Wakefield

Janice Stanton, of Cushman & Wakefield

Let’s hear it for New York, concrete jungle where dreams are made of, and still the place where investors like to put their money most.

According to Cushman & Wakefield’s annual Winning in Growth Cities report, which researches real estate markets on a global scale, and was presented at this year’s EXPO Real trade fair in Munich, Manhattan is still the crown jewel of commercial property investment, “significantly pulling ahead in global lead” with volumes rising 39 percent to $49.2 billion in the year to the second quarter of 2013. It is also the top city to invest in multi-family and hospitality sectors, although other sectors are predicted to follow suit shortly.

“Traditionally, New York City has always been a top performer, it’s one of the gateway global cities,” Janice Stanton, senior managing director, C&W Capital Markets told Commercial Property Executive.

Despite various debates among industry professionals about the future of NYC real estate investment with the new mayoral election, Stanton concedes it will not have a major effect, although everyone is wary of change.

“Everybody loves Bloomberg, of course everyone is apprehensive about change, but New York was number one this year, New York was number one last year, New York was number one before Bloomberg too,” she laughed. “New York has the resiliency to weather downturns and reinvent itself in growth markets, with that said, nobody likes change, because change is the unknown.”

In other cities: London holds second place, with a 6 percent increase in investment volumes, totaling $32.3 billion. It is also the city with the largest office market, currently, which Stanton attributes to lenders tightening their belts in the U.S. post-recession, and the rise in interest rates. She, however, sees the office sector rebounding and taking lead in the Big Apple imminently.

Los Angeles showed the fastest growth of all 25 cities by jumping ahead of Tokyo, which remained flat, and taking third place on the list, increasing by 77 percent in RE volume. It is also the top city for industrial investment. Hong Kong, which placed seventh, is the top investor for retail.

Other cities to keep an eye on for global investment domestically, according to Stanton, are Washington, D.C. over the long-term, despite the current sequestration, as well as Boston and San Francisco. On a global scale: London and Paris are a good bet.