New York Ranked Number 1 City for Real Estate in 2011
By Iman Omar
The Association of Foreign Investors in Real Estate (AFIRE) has voted New York the prime location for real estate investments in 2011. According to the annual survey, conducted by the James A. Graaskamp Center for Real Estate at the Wisconsin School of Business in late 2010, New York is the number 1 preferred city for foreign real estate investors both worldwide and within the U.S.
This brings the city up from being ranked second within the U.S. in 2010. Washington D.C., which previously held the top spot, now comes in at number 2, followed by Boston, San Francisco and Los Angeles. New York received almost 40% of the total vote, Washington received just over 30%, and the remaining U.S. cities in the poll each received under 10%.
When asked about their preferred U.S. property type to invest in, respondents ranked multi-family (apartments) first. Retail and hotels rose to number 2 and 3 respectively from their prior number 4 and 5 spots. Offices now hold the number 4 spot, followed by Industrial properties.
Internationally, New York rose to number 1 from its previous position at number 3. Washington D.C. remained at number 2. London, last year’s top contender and Global Top 2 staple since 2001, fell to number 3. Paris came in fourth and Shanghai, fifth.
The U.S. also came out on top in nation rankings it was the most targeted country for foreign investments, ranking almost four times higher than the second place holder, the U.K. Germany came in third, followed by China, and then France.
The U.S. took the number 1 spot among countries providing the best opportunity for capital appreciation in 2011, with about 65% of the total votes over six times as much as the second place holder, China, which drew 10% of the votes. The U.K., Brazil, and Australia followed, with under 10% each.
Additionally, the U.S. was once again considered the country providing the most stable and secure real estate investments. Germany came in second, followed by Canada, the U.K., and Australia.
About 72% of AFIRE members stated that they intend on investing more capital in the U.S. this year than they did in 2010. Overall, foreign perspectives on the U.S. real estate market were looking up, with 40% of respondents stating they were more optimistic than at the start of 2010 and 55% stating they felt the same as last year. A mere 4% said they were more pessimistic than in 2010. AFIRE has nearly 200 members from 21 countries, who hold more than $627 billion of real estate worldwide $265 billion of which is invested in the U.S.
James A. Fetgatter, chief executive of AFIRE, expressed surprise at the increase in foreign interest in the U.S. He explains, As the fear of a double-dip recession has faded, investors are becoming more enthusiastic about the prospects for the U.S. economy and are taking aim at real estate investment opportunities in the U.S. However, their strategy is more akin to a rifle than a shotgun. Except for multi-family housing, they are not scattering their interest throughout the U.S., but rather narrowly targeting it to New York City and Washington, D.C., to an even greater extent than in previous years.
The survey’s results have shown that 2011 marks the strongest year in about a decade for foreign investments U.S. real estate.
Resources:
Wisconsin School of Business http://www.bus.wisc.edu/realestate/news/afire.asp
Association of Foreign Investors in Real Estate – http://www.afire.org/