In the CRE world, Manhattan, as always, remains vastly different than the rest of the universe. New research from Cushman & Wakefield shows that New York ranks number one as the world’s fastest growing city for commercial real estate investment for the first time in almost four years, knocking London out of the top slot for the first time since 2007.

And investment activity here shows no sign of slowing down: By the close of the third quarter of 2011, $19.4 billion in sales were completed in Manhattan, with $3.8 billion currently under contract, compared to $8.1 billion closed by the end of Q3 2010, says C&W. And out of that, 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.
But despite these strong numbers, the city faces headwinds from the backbone of its local economy: the financial sector. In October, New York State Comptroller Thomas P. DiNapoli estimated that the city could lose nearly 10,000 jobs by the end of 2012, which would bring total job losses in the securities industry to 32,000 since January 2008. Why? You've herd it before: Continued volatility on Wall Street, financial uncertainty in Europe and global unrest across the world.
As a result, many commercial real estate investors have been seeking liquidity options in American gateway cities, like New York. We’ve been seeing flight-to-quality and recaps like never before (think 230 Park Ave., 3 Columbus Circle, 1633 Broadway), while secondary and tertiary markets continue to remain stagnant.
That, to me, questions the viability of the so-called “recovery.” As a city, are we truly stabilizing, or are we just seeking shelter in safe assets? While New York is an extraordinarily resilient place, I am wondering when the CRE industry will start seeking growth and not just security.