Anyone interested in investing in Manhattan real estate?

Question

Curious to know if anyone is looking to invest in manhattan real estate? there are a ton of pre construction opportunities coming to market.

Arjun K. · Answer

When you say the world is getting smaller, I think that hurts NY.  E.G., SF catching up to NY.  Austin moving up etc.  I don't think NY has a lock on many cultural aspirations, so the 'premium' for the NY experience is less.  Many cities have equal pizzerias (napoli), ethiopian food, etc. NY, in my opinion, has become an increasingly common and to a degree NY itself has become homogenous with the various chain offerings of "local" product (e.g., replacing the deli with xyz chain).

But it will remain a store of value because people know what people know.  At some point, investing in other people's store of value/trophy assets is not investing -- its trading to the greater fool.

Jeff Bridges · Answer

What is your investment strategy exactly? What are your exit strategies once you purchase said condo conversions for $900k? Do you expect to produce any rental cashflow on ~$5000/month carrying costs + $1000+ monthly building maintenance fees? Do any of your current investment properties in the city have positive cashflow? If so, do you mind presenting ballpark figures on income/expenses? I'm super curious because I thought it was never before possible unless you've owned property since the 80s and bought super low or own an entire rental building. Would be interesting to know it is possible.

Cheng Liu · Answer

Thanks for the msg Arjun, love the commentary and opinion!

I think when you look at real estate from a global standpoint there are only a few cities in the world where high net worth individuals will congregate and move their capital. Yes Hong Kong, London, Paris, Dubai and New York. These are truly global cities with NY being the most multicultural of them. With that being said in this day and age of free information and advanced connectivity the world is a much smaller place. Investing and keeping up to date with your global investments is not as difficult as it was 5-10 years back. Hence a traditionally illiquid investment such as real estate has become much easier to invest in, more liquid and hence more valuable.

I believe Manhattan continues to have appeal for a variety of reasons. Strong US legal system that protects asset ownership, multicultural, great cuisine, nightlife, easy of transportation, low crime rate, and a city thats constantly reinventing itself.

Now whats the issue with NYC real estate and wheres the opportunity? The problem lies in the low inventory of apts in NYC. The new developments that are coming online are catering exclusively to the ultra wealthy. The cheapest new developments are starting in excess of $3M an apt! The opportunity I'm seeing is that there are a few condo conversions that are priced below $1M mark and accessible for middle to upper middle income earners. Im looking for peope who are interseting in co investing along with me in these condo conversions.

Full disclosure I am a licensed real estate agent in nyc and i do currently own multiple investment properties in the city.

Arjun K. · Answer

Can you invest in Manhattan?  Seems like a safe harbor market for Russian and Chinese more interested in property rights than making a buck.

I am personally negative on Manhattan longterm, as I think many aspects that made NY the center of US cultural mindset being competed/globalized away due to Internet.  But I guess one more Twitter IPO or another 30% rise in Hang Seng can mean another 50% rise in property prices - what do I know.

Chad Bernstein · Answer

@Cheng Liu Hey Cheng, do you think you could provide a little more info?