NY Commercial Real Estate Drops to Third Place in Volume

July 26, 2012 / Elizabeth Buckley, Commercial Property Analyst

New York trails Paris and London in the vying for number one spot in commercial real estate purchases.  The debt crisis plaguing Europe does not have an effect on foreign buyers from overseas. Following Paris and New York, London is considered the most liquid real estate buying city, propelling UK to a bed of activity in the commercial real estate buying sector.

NY Commercial Real Estate Drops to Third Place in Volume

London’s foreign investments rose in the 3 month period, by 30 percent. That occurred in April, May and June. New York, which was in first place last year, had a decrease of 43 percent in that period. Last year at this time, New York was in first place. Paris reported a 53 percent rise during the last year, taking it to the second place position.

London is home to Western Europe’s tallest skyscraper. It towers above the city’s other buildings at 1,016 feet (310 meters). It is going to have a total square footage of 53,000 and sits conveniently just a mile’s distance from the Bank of England. This should be a prime rental spot, especially in light of the vacancy rate of office space, which fell between five and six percent in the first quarter of 2012.

Sales have fallen in commercial real estate sales to 52 billion euros (62 billion dollars), which is nine percent less than last year. This was in the first six months. It is predicted that investments will drop ten percent from last year’s 119.7 billion euros.

Investors in France bought 40 percent less commercial property than last year due to expiring tax rules that gave an advantage to domestic purchases. That constitutes a significant decrease over last year when the total reached close to 70 percent.

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