As Goes New York, So Goes the World
The New York economy is flourishing—and that’s good for everybody, not just New Yorkers. Across the world, countless people are grabbing their money and valuables and are trying to get them out of their home countries—away from the strife, crime, anxiety and disaster in their homeland. They continue to look to America where there has been a steady political climate for more than 225 years. No coups, no military takeovers, no neighbors threatening to invade, just relative peace in a civilized society. These are people seeking to preserve their wealth and they want to live as we do. And, mostly, they look to Gotham as the place to do it.
These are pretty good times for New Yorkers. Crime is near all-time lows, the job base is increasing and investment here is very strong. The only thing that we might have to complain about is that it’s very difficult to find a property to purchase. The marketplace in New York is very competitive and entry barriers remain high for the uninitiated—the influx of foreigners and foreign money makes it more competitive. Just as experienced leasing brokers expand parameters when there is a difficult assignment to fulfill, investors have expanded their parameters as well. Yes, smaller cities have their own inducements: In most cases there’s better workforce housing, and commercial purchases may bring significant year-over-year returns, but it’s still sexy to buy an office building in New York. Even when you have competition from scores of credible buyers from around the world with fresh powder, it’s easy to see why people might start expanding where they shop for properties.
Those of us who have been fortunate enough to live and work here in New York know how lucky we are. New York is prospering because it is the safest big city in America where there is freedom to walk the streets, there is freedom to live where you want (if you can afford it) and there is freedom of speech. In first-world nations like France and Denmark, simple satire is taken so seriously that people are threatened, hurt or killed. In New York, people live side by side with each other and are free to express themselves, the great melting pot where everyone was once an immigrant.
For those seeking to preserve their wealth, moving money to New York is the pinnacle for safety and value. Those who see America as a safe place to invest, see New York and America that way right now. Even here at MHP we have noticed a big difference. For many years our equity partners were, for the most part, American firms—but for the last several buildings we’ve purchased, we have equity partners from China, Germany, Korea and India in addition to America. We have seen Fosun from China buy One Chase Manhattan Plaza (now 28 Liberty Street)—and perhaps buying Cushman & Wakefield, too. We have seen Anbang Insurance from China purchasing the Waldorf Astoria hotel for $1.9 billion. We have also seen large purchases by Russian, French and Canadian investors. Several Middle Eastern countries and other Far East countrymen and women, too.
Of course, the list of big money purchasers includes more than just foreign buyers. There are plenty of domestic buyers too, all with one thing in common: safety, security and a deep desire to be in New York like millions before them. This year, the influx will be significantly higher as we see big buys around the country, not just that $20 million apartment or that billion-dollar office building in New York, but office, industrial and apartment complexes all around the country.
David Greene is Principal/President, Brokerage Services, MHP Real Estate Services.