New York tops the global list of inbound foreign real estate investment at USD14.3bn, just ahead of London. Vacancy rates are 9.3 percent in Manhattan, up a little from 2015 at 8.5 percent, but commercial investors have expressed some concern about how the sector will fare should interest rates increase during 2017.
New York City saw USD43bn in construction spending in 2016 – an all-time high. Manhattan remains the dominant sector for construction, with 60 percent of new projects, followed by Brooklyn and Queens.
Manhattan dominates in the office sector with several new towers under construction, including 1 Vanderbilt next to Grand Central Station and 3 Hudson Boulevard at the Hudson Yard. The former, at a cost of over USD3bn, will be the most expensive tower built in Manhattan.
The new administration has promised to spend on infrastructure and many ageing roads, bridges and sewerage systems are in need of upgrade, but high and increasing costs of construction are somewhat of a deterrent.
A slowdown in Chinese investment may occur in 2017 as the Chinese government enforces stricter scrutiny of offshore investments, but also as a consequence of anticipated tougher trade measures.
The long upswing in New York real estate has seen a boom in construction and there are some fears that the cycle may turn before long.