By Holly Dutton
Foreign tongues are wagging about investment in Manhattan real estate — and they say it’s as hot as ever, according to investment banking and brokerage firm Brookfield Financial.
Despite a recent dip in the foreign capital infusion into the New York real estate market, Brookfield — which has 14 offices in eight countries — said interest from investors across the globe remains high and that the declining trend should turn around by the end of the year.
“We are in daily contact with our global partners and their feedback suggests that the numbers do not tell the whole story. Based on first-hand conversations with the numerous foreign investors that the Brookfield offices have direct access to, overseas demand for Manhattan real estate remains as strong as ever, especially from Canadian pension funds, Asian institutions, and Brazilian high net worth individuals,” said Eric Anton, managing partner of Brookfield Financial.
“It’s clear to us that investors abroad still see the value of Manhattan real estate and remain particularly enamored with the office and retail sectors. By the end of the year, we are forecasting that this downward trend will begin to reverse itself and foreign investment numbers will uptick.”
Foreign capital has accounted for almost $11 billion of investment in Manhattan office real estate since the beginning of 2012.
However as of the end Q2 2013, investments have decreased more than 26% year-over-year based on a four quarter rolling volume, according to data from Real Capital Analytics.
The perceived slowdown is causing the general New York real estate market to question if the demand for Manhattan real estate from abroad has waned.
However, based on the on-the ground feedback from the collaborative Brookfield Financial partner offices worldwide, which includes locations in Canada, UK, Germany, Australia, Brazil, India and China, there’s still an enthusiastic demand for New York commercial real estate from international investors and Brookfield believes that the recent slide will change course and veer upwards during the last six months of the year.
Anton added, “The one sector that we do expect to remain temporarily stalled is foreign investment in New York residential assets. Our feedback indicates that international investors are still somewhat hesitant towards making a commitment in the residential sector and we expect that trend to continue for the time being.”
Yet some foreign investors are even warming to that sector, as Brookfield Financial was recently commissioned by a major Asian investor to deliver a detailed study on the status of the New York City multifamily market for future investment consideration.