In New York, property investors have turned their attention towards the lucrative deals presented by the commercial property market. This sudden interest is the result of the option to diversify your property investment portfolio, along with a high income potential and tax breaks.
Commercial property investment in New York is very profitable, but it is also a complex business, in comparison to investment in residential properties. There are number of factors that affect the valuations of commercial properties. It certainly pays to study the market, tread cautiously and remember, when it comes to commercial property, it really is a case of location, location, location.
The reason that New York is the desired choice for high net worth individuals is due to the fact that the city remains relatively safe from any localised economic downturns. This has been illustrated during the recent global economic downturn, with New York being one of the first cities in the United States to experience a recovery.
Global real estate specialists Cushman and Wakefield, reported ‘Through the first nine months of 2010, the value of commercial property investments closed and under contract in Manhattan totalled $9.4 billion, up 168 percent from the $3.5 billion of investment transactions completed in all of 2009. In Midtown, closed property sales (excluding properties in contract) totalled $6.3 billion, up 103.5 percent from the $3.1 billion completed last year. In Midtown South, closed property sales totalled $1.1 billion, up 370.2 percent from the $235 million completed last year. And in Downtown, closed property sales totalled $611 million, up 213.3 percent from the $195 million completed last year.’
Following these reports, Joseph R. Harbert, Cushman and Wakefield chief operating officer for the New York Metro Region, said: ‘The increase in investment activity year to date is significant for the market overall, despite the fact that last year set an extremely low benchmark. What this level of activity suggests is that investors have taken note of improving market fundamentals and have identified Manhattan as a primary investment target.’
