From a global perspective, Manhattan real estate is a bargain. Manhattan’s prices remain a relative value when comparing investment potential here to that of properties around the world. That fact continues to attract domestic and foreign buyers to Manhattan’s real estate market in a quest to secure their assets.
Continued economic and political malaise across Europe and global hot spots have driven investors to the safety of New York. According to Knight Frank’s Global House Price Index, the United States has seen consistent growth of its housing market, with an average of 10.2% nationally. This is in stark comparison to the mean 0.7% average growth seen across Europe, and global growth average of 2.4%. The fact is, the United States remains the dominant world economy, and its housing market has global implications. New York’s luxury condominium market has seen its median price rise 8.2% this year with international buyers accounting for half of all sales in new developments.
Many buyers realize that with lack of inventory and some of the highest levels of absorption since 2007, time is of the essence. With all of these factors considered, many investors are looking for a place to store their assets and have found, quite literally, a safe deposit box with a view.
Safe is, of course, good, but besides safety, many individuals see the potential of appreciation over time in Manhattan real estate. Appreciation of value, coupled with the relative safety of investment, makes Manhattan the perfect place to make an investment. The true value in purchasing real estate is that you can enjoy your investment while it appreciates in value. Many new developments under construction are marketing their dynamic city and park views and the highest level of service and security anywhere in the world. New York may not be a destination of choice, but with its rental market demanding some of the highest prices this city has ever seen, the steady flow of income from an income bearing property may be something to consider. Investments of this nature are privy to a tax incentive known as a “1031 Exchange,” which many buyers utilize to get the most value from their investments.
Even as some of New York’s best investments start to enter the skyline, their prices remain relatively low in comparison to similar developments around the globe. An apartment at Monaco’s Tour Odeon sold for 8,850 USD/square foot (95,261 USD / m2) and a buyer paid slightly less, 8,799 USD/SF (9,4712 USD/m2) at Opus by Frank Gehry in Hong Kong. At One Hyde Park in West London, prices have exceeded 9,500 USD/SF (102,258 USD/m2). Average prices in new developments across Manhattan have yet to see these types of prices. A contract is out for the duplex Penthouse at One57, one of Manhattan’s newest skyline additions (65% sold, Avg. 5,880 USD/SF or 63,292 USD/m2), for about 6,666 USD/SF (71,753 USD/m2). Across town, Rafael Vinoly’s 432 Park Avenue, which will be the tallest residential tower in New York, has prices starting at 6,000 USD/SF (64,584 USD/m2).
There are a significant number of new construction projects ranging in price from 1,500 USD/SF to greater than 100,000 USD/SF (16,146 USD – 107,640 USD/m2). Classic style residences are being offered at the Carlton House (60% sold, Avg. 3,595 USD/SF, or 38,697 USD/m2) and 737 Park Avenue (50% sold, Avg. 3,626 USD/SF, or 39,030 USD/m2). The Flatiron District, one of Manhattan’s most sought-after areas at the moment, has plenty of new construction as well: 10 Madison Square West (Price range: 1.82M USD – 35M USD) and Huys at 404 Park Avenue South (50% sold, Avg. 2,040 USD/SF, or 21,959 USD/m2). Downtown developments continue to see the best value, and investors are jumping at the chance to own in new construction such as 56 Leonard and Walker Tower (Avg. 3,524 USD/SF, or 37,932 USD/m2), which are almost completely sold out (85% and 60%, respectively).
Hard assets such as real estate provide investors with the ability to hedge against economic and political factors that affect the performance of their investments, and Manhattan continues to provide real value to investors worldwide.
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|Noel Berk, principal||Elizabeth Omedes, principal|
Manhattan’s New Skyline
IMAGE (Knight Frank)
Knight Frank Global House Price Index