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HOW A PROPERTY MANAGER ASSESSED THE US

8 February 2012

An insight into New York and San Francisco and a sneak peak as to what IP Global will soon be looking into.

By Guest Blogger:
Charlie Rosier -  Senior Investment Manager, IP Global - Hong Kong

Following my trip to US I thought I would give you an insight into the various markets and a sneak peak as to what IP Global would soon be looking into.

The Big Apple – New York

Alistair Auty, Jonny Morgan and a host of others dragged me across NYC, looking at projects in Jersey City, Queens, Brooklyn, Harlem and of course Manhattan. I visited developments from USD $500psf up to USD $4,000psf. In general sentiment seems to be positive, sales are trickling in slowly and December/January seems to have been a strong month for most developers. In terms of new construction, there is not a great deal going on, most projects have been launched and the concept of “off-plan” sales died in 2008. That said for the right project, with small number of units, sales are happening quickly with much appetite from overseas – in particular mainland China and Malaysia.

I saw almost all our existing projects and have to say that I was most impressed with 77 Hudson. The views are stunning and the commute across on the Path train is literally one stop from the new WTC (which is also a phenomenal building similar to the Shard in design). Finishes and amenities are of a high quality – Here is a video highlighting the project from an owner's perspective:

I was treated to lunch at a local “pub” – Monday and the place was full. There is a new Whole Foods in the building as well which, as I learnt in NY is the catalyst for any up-and-coming neighborhood.

Next project….given all your feedback, there was obviously a demand for some more “prime” product. I am pleased to say therefore that we should have a fantastic project on Fifth Avenue over-looking Central Park – due to launch later this month. Prices from USD $742 psf. There is definitely still a strong investment case for Lower Manhattan however and all being well we will have an off-plan project to compliment in Q1.

The City by the Bay – San Francisco

San Francisco is a great city, unlike Manhattan you can get great sky-line views without having to leave the City. I was fortunate enough to have a Chinese tour-guide for one day, who gave me an insight into the Chinese culture and the “pull” for Asians – there has been a 50% increase in the Chinese population in past 30 years. Unsurprisingly the main reason is education - many Chinese want to send their children to Stanford University and so relocate here so that they are in the right catchment areas etc. 

Whilst there is a strong financial hub in downtown, SF is home to more than 30 international financial institutions, the biggest economic growth area is technology. Twitter, Google and salesforce.com are the largest employers and occupiers of commercial space. In terms of residential market – rental growth is phenomenal (64% population rent) however psf values are still under their peak – some 15-20%. Everyone I spoke to indicated that the market has now hit the bottom which makes it the ideal investor’s market. However there are almost no condo projects, developers are turning their projects into rental buildings to take advantage of the strong rental market and also because this is the only way for them to secure construction finance. There is only one project “off-plan” which we are hopeful of securing, with a view to launch in March….Prices from USD $553 psf. This is a fantastic project by one of the largest developers in US and should have serious “China Appeal.”

Interested in hearing your perspectives & questions on SF & NY? Would be happy to answer them.

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IP Global

Written by IP Global

IP Global’s full-service approach is built on extensive market research and analysis combined with a significant financial commitment to every investment we offer. We are able to manage the entire investment process end-to-end, from sourcing, financing, and management to those all important exit strategies, making investment in real estate as straightforward as investing in more traditional asset classes. Our expertise, experience and strong record have produced over USD2.8 billion in international real estate investments in over 30 markets worldwide.

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