New York Bumps London as Top City for Foreign Real Estate Investment

Michael Tucker mtucker@mba.org

April 16, 2019


New York regained its perch as the number one global city for foreign investors, displacing London, reported A Fellowship for International Real Estate, Washington, D.C.

Investors ranked New York the leading global city for having a stable and secure real estate market and second for capital appreciation, AFIRE's annual International Investor Survey said. Boston, Los Angeles and Seattle tied for fourth place.

"Commercial real estate continues to perform well and is an important part of any long-term investment portfolio strategy," said AFIRE CEO Gunnar Branson. "As global institutions hold assets over an extended time horizon, often in excess of 10 years, they play close attention to the factors driving growth in global cities as well as the risks, and prudently adjust their strategies accordingly. The fact that U.S. commercial real estate has attracted historically high levels of capital from institutions around the world in the last few years is a strong vote of confidence in the long-term performance of commercial property in U.S. cities."

Investors "overwhelmingly" indicated confidence in strong U.S. economic conditions, AFIRE said. Nearly 15 percent of those surveyed said they expect 2019 to present more attractive investing opportunities in U.S. real estate than in 2018, including among emerging niche markets and property types.

Some analysts predict a worldwide economic slowdown for the remainder of 2019, citing a low 0.2 percent growth rate in Britain and the Eurozone in 2018's final quarter. The Associated Press reported global finance officials recently agreed to cooperate to boost the world's economy. "Officials wrapped up the spring meetings of the 189-nation International Monetary Fund and the World Bank on Saturday, expressing hope the slowdown that began last year will be followed by stronger growth in the second half of this year and into 2020," AP said.

The IMF's steering committee agreed to "act promptly to shore up growth for the benefit of all" to increase economic expansion worldwide, AP reported.

When asked about the greatest risks for cross-border investing, AFIRE respondents pointed to currency fluctuations, rising interest rates and geopolitical uncertainty. Nearly 80 percent of respondents said they agree the ongoing trade and tariff disputes between the U.S. government and other nations will negatively affect cross-border investments in 2019, the report said.

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