To date, class A product accounted for $6.3 billion--or 32%--of the total property sales through Q3 in Manhattan, followed by hotels at $3 billion and multifamily properties at $2.9 billion. While institutional investors, private capital and REITs still lead the New York City market, foreign investors account for 9% of total activity in Q3.

Another driver in the investment market includes recapitalizations, like Paramount Group Inc.’s 49% recap of 1633 Broadway, Bank of China’s execution of a $250 million five-year mortgage loan for the refinancing 3 Columbus Circle and Invesco Real Estate’s $760-million recapitalization of 230 Park Ave.

But although New York is the top city for real estate investment globally across all investors, competition from other markets persist. London remains the top choice for office investment, Hong Kong reigns king for retail and Signapore experienced the greatest amount of investment volume in the industrial sector, suggesting that as the recovery continues, buyers will look for growth and not just security, the study notes.

In response to the report, Peter Slatin, editorial director and associate publisher of Real Capital Analytics, tells GlobeSt.com that the flight-to-quality trend raises questions about the viability of the recovery. He explained while class A space is being snatched up, investors have curbed their appetites on secondary or tertiary markets, where risk is considerably higher. “They’ve been forced to go on a diet due to lack of funding,” he says.

At the same time, Slatin says like other cities, New York faces potential challenges due to the uncertainty in the financial sector, but says the city isn’t wholly dependent on that industry due to the diversity of its tenant base. “New York is still extremely resilient,” he says. “It has a deep bench, so to speak. It has the media and entertainment businesses and a big tourist draw. New York faces challenges, but it still has an edge.”