Manhattan loses top spot among foreign real estate investors

New York

MANHATTAN lost its crown as the top choice for foreign investors buying US property, with offices falling out of favour amid the pandemic and money moving into industrial properties.

Overseas investments in Manhattan real estate plunged 79 per cent in the 12 months through March to about US$2 billion, according to Real Capital Analytics.

That came as cross-border investors poured US$10.6 billion into US warehouse and logistics properties - a 39 per cent increase and the first time they outpaced international spending on office buildings.

Total spending by foreign buyers fell 33 per cent to US$35.2 billion in the period.

"Manhattan will live and die based on the health of the office market," Real Capital senior vice-president Jim Costello said in an interview.

Seattle climbed to No 1 with US$2.5 billion in foreign investment, down 11 per cent from the prior 12-month period. The North-western city, which is home to tech powerhouses Amazon.com and Microsoft, continued to lure money from nearby Canada, the biggest source of foreign capital in US real estate.

Manhattan briefly lost its title as top US target for foreign investors in 2009 to Washington, DC, when transaction volume collapsed globally, Mr Costello said.

The last 12 months were a more mixed bag, with big drops in purchases of office, hotel, retail and apartment properties while spending rose on senior housing and industrial real estate. BLOOMBERG