New York and the world duke it out
In a city where cramped studio apartments generate six-figure bidding wars, it’s hard to imagine a place where real estate is even pricier. But there are cities out there that can make Park Avenue look like a bargain. According to data from London-based brokerage Knight Frank, $1 million would buy you only about half a studio in Monaco.
This month, The Real Deal took stock of how New York real estate compares to other major international and U.S. cities, from London to Los Angeles. We chose 25 preeminent cities, in different geographic regions, that compete with New York for real estate buyers and tourist dollars, and pored through real estate data from each one.
Which city is struggling most to weather the worldwide financial meltdown? Which has the glitziest and most expensive stretch of retail stores on the planet? Which is stuck trying to unload the most empty office space? Where are the most expensive hotels in the world? And which urban mecca has the world’s most expensive coffee? The answers will undoubtedly surprise you.
Since the Lehman Brothers crash in 2008, Manhattan isn’t the only city where price cuts now reign supreme. But while New York residential real estate has only recently begun to show signs of a possible recovery, other cities — like Hong Kong and Beijing — have already seen price increases on the order of 40 percent. (In fact, the real estate craze in China has reached such dizzying heights that the government there has started taking steps to limit speculative property investments.)
On the commercial side, New York and other major financial centers were hit hard in the downturn, with steep drops in their office rents. Now, their recovery is lagging behind lower-profile cities like Washington, D.C., which are less reliant on the financial services industry.
When it comes to retail, New York City’s prime shopping destinations have outperformed many premier international locations, like Causeway Bay in Hong Kong and Rodeo Drive in Beverly Hills. But the weak pound has recently attracted large numbers of European tourists to New York’s closest rival — London — with retail rents rising there as they’ve declined here.
Currency devaluation has also helped the English capital in the hotel sector. In 2008, New York had the highest hotel occupancy rates of any city tracked by The Real Deal, but that changed last year, when London jumped ahead of the Big Apple.
Meanwhile, Mercer’s annual Cost of Living Survey found that New York leaped into the list of top 10 most expensive cities in the world, up from 22nd place the previous year. And finally, The Real Deal mapped out where New York-based developers are investing internationally.
COMPANIES AND PEOPLE