Will Foreign Investment Save New York City?

James Nelson

NEW YORK CITY—During the first three quarters of 2016, the New York City real estate investment market continued to slow in comparison to historic highs from the past two years, which set records for dollar volume in 2015 and properties sold in 2014. Despite this slowdown, New York City recorded $44.4 billion in sales through mid-September, putting the City on pace to reach the third-highest dollar volume on record behind 2007 and 2015. That being said, the aggregate sales consideration through the first three quarters of 2016 was $30.2 billion, a 29.3 percent decrease from the same time last year.

This decline may have been more severe if it were not for the increase from foreign investors. This year, the Association for Foreign Investors in Real Estate ranked New York City #1 again for global investment. This was ahead of London, San Francisco, and Berlin. Furthermore, AFIRE’s survey stated that 64 percent of foreign investors said they would increase their US allocation, while 31 percent said they would maintain their levels. Finally, multifamily ranked the most favored asset class followed by industrial, retail, office, and hotel.