Investing in Commercial Real Estate in New York 2015

 

New York City has always been a major lure for people looking for that special brand of excitement only Manhattan can deliver. Yet beyond the artists and actors who still flock to this city there are also plenty of real estate investors who feel this town has an attraction like no other. Will all this though, is investing in commercial real estate a sound idea in 2015? Can investors feel confidence after all the dramatic swings in the market since 2008?

Of course, no one can deny the wariness that’s set in after 2008. Now, with China’s economy looking unsettled, there are even more reasons to feel skeptical about the wisdom of investing. Yet New York remains an incredibly attractive place for investors, and the attraction does seems to be ongoing.

REASONS FOR HOPE IN COMMERCIAL REAL ESTATE

One very positive factor in the future of commercial real estate in New York is the rise in demand for commercial properties. According to a recent study by Prudential Investment Management cited by the New York Times, there is due to be a huge rise in the population in major urban areas, notably New York, over the next 30 years. This rise in urban density will increase the demand for developed commercial properties like retail and residential buildings, as well as offices and industrial spaces. All of that points to a big return on investment for New York properties.

What Do The Millionaires Say?

Major investors like Warren Buffett always hearken back to the tried and true wisdom when thinking about investing in a major center like New York, and from what Buffett says, there’s still a good argument to be made for investing in commercial real estate here.

According to Buffett, the key is to focus on undervalued and underutilized properties. According to an interview in dailyfinance.com, Buffett took a look around in New York and found commercial properties that had intrinsic value that was not being capitalized on. His feeling was that if this property could be rehabbed, and the empty storefronts leased out to stable businesses, he’d have a profitable property on his hands—and he did.

So yes, there are many arguments to be made in favor of investing in commercial real estate in New York. So despite the ups and downs of the market, maybe it really is time to jump back in.

Roman Temkin is a real estate developer from NYC.