NEW YORK CITY-New York City has reined king as the world’s largest commercial property investment target despite political uncertainty and turbulence in global finance and debt markets, new research from Cushman & Wakefield shows. At year-end 2011, New York’s commercial real estate sector led the globe with $35.7 billion in property investments, beating out London with $29.2 billion and $22.6 billion in Tokyo.
While investor sentiment was mixed for much of 2011 as concern about the Eurozone crisis offset emerging positive news about US fundamentals, ultimately, investors began a modest move up the risk-reward spectrum in the latter portion of the year, as evidenced by an uptick in retail activity and increase suburban office property in top metro areas, says Greg Vorwaller, global head of capital markets at C&W, in the report.
“Consistent with what we saw globally, there was a flight-to-quality in the Americas with investors focusing on best in-class assets in flagship markets,” Vorwaller says, noting that cities like New York, Washington, DC, San Francisco, Boston, Los Angeles and Chicago benefitted from a renewed sense toward safety and liquidity.
We Also Recommend:
- From Adams to Austin St., Outer-Borough Retail Goes Vertical
- Hammerson Will Sell $793M Office Portfolio
“This cautious optimism is expected to carry into 2012 and will bode well for better quality assets in second market locations, in particular, as the CMBS markets are revived,” he adds.
Overall, global investment activity rose 14% to $727 billion, or $808 billion including multifamily properties, C&W data shows. Out of that, the Americas comprised $235.7 billion of that chunk, up 49% from 2010, mainly driven by the US, Mexico and Chile. As a result, commercial property volumes are now 83% up on their 2009 lows.
North American commercial property investment rose 52% versus a 17% increase in EMEA, 9% in Latin America and just 0.5% in Asia Pacific. And while China remains the largest global commercial property investment market, its lead over the US has fallen from 153% to 57%.
In New York specifically, the volume of property sales closed in 2011 amounted to $25.8 billion by year-end, with $3.1 billion currently under contract, compared to $13.7 billion closed in 2010—an increase of 88%, according to C&W.
Out of that $25.8 billion, class A office space accounted for more than $9.4 billion—or 37%—of the total property sales last year, followed by other office space at $3.8 billion, hotels at $3.6 billion, land/development sites at nearly $3.6 billion and multifamily at almost $3.4 billion.
The ranking marks the second consecutive time Manhattan has surpassed London in terms of property investment. In the third quarter, New York bumped London out of the top spot as the world’s fastest growing city for the first time since 2007, GlobeSt.com previously reported.
Want to continue reading?
Become a Free ALM Digital Reader.
Once you are an ALM Digital Member, you’ll receive:
- Breaking commercial real estate news and analysis, on-site and via our newsletters and custom alerts
- Educational webcasts, white papers, and ebooks from industry thought leaders
- Critical coverage of the property casualty insurance and financial advisory markets on our other ALM sites, PropertyCasualty360 and ThinkAdvisor
Already have an account? Sign In Now
*May exclude premium content© 2024 ALM Global, LLC, All Rights Reserved. Request academic re-use from www.copyright.com. All other uses, submit a request to [email protected]. For more information visit Asset & Logo Licensing.
