Why Canadians Are Taking Over Manhattan Real Estate
If you’re like most of us, it won’t come as a surprise when I tell you that New York City has the most competitive & luxury-oriented real estate market in all of the United States. Something that may surprise you though is the fact that Canadians quadrupled their Manhattan Real Estate properties in 2016.
In fact, Canadians alone account for almost a 3rd of the $25.6 billion in global capital that went into the city’s market last year. They spent an upwards of $8.3 billion & used it to purchase some of the most iconic properties in New York.
For example, the main office of Rupert Murdock’s 20th Century Fox & Hudson Yards on Manhattan’s West Side. But why would this happen? Why would Canadians ramp up their spending in such an increasingly competitive market?
To put it simply – it’s just because they can.
Of course, the full story is a lot more interesting. As it turns out, Manhattan is sort of the “Goldilocks” area for Canadian real estate investors. Sure, it’s a highly competitive market. But that competition only signifies that the market itself is growing, as opposed to the relatively stagnant condition of Canada’s real estate market.
Also, compared to the immensely volatile condition of real estate globally, NYC is extremely stable. Long story short, it’s a wise investment for Canadians, despite the competition.
Speaking of investments, let’s talk about the Canadians actually making them. This group of institutional investors is made up of pension funds, insurance companies, & asset managers.
For instance, it was Ivanhoe Cambridge Inc., the real estate division of the pension fund Caisse de Depot et Placement du Quebec that purchased the 20th Century Fox headquarters. Oxford Properties Group Inc., another pension fund division, bought Hudson Yards. They plan on developing it into a commercial/residential area that offers 5,000 residences & 5 office towers.
What does all this Canadian attraction to the Manhattan real estate market mean for the rest of us? Well, it simply confirms the growing influence of foreign interests within the market. Canada has purchased at least 84 properties in Manhattan in the last 10 years, & it will be quite interesting to see if they continue the trend in the coming years.
It should be noted also that while Canada has been the biggest foreign buyer for the past few years, they certainly weren’t alone. Other countries with their share of NYC real estate include the United Arab Emirates, China, & Israel.
In the end, there’s really only one question we must ask ourselves: Is this a positive sign for New York, & for America overall?
The answer, in our honest opinion, is a resounding yes.
The Manhattan Real Estate market is a beacon of hope in the otherwise suffering US economy, & we can only hope that its success will spill over into other industries, as well as our country’s real estate market at large.