Total global real estate investment reached $1.8 trillion over the past year, a record amount.
New York City once again led the way, with more money poured into real estate than any other city, according to a new Cushman & Wakefield global capital market report of the top 50 cities.
But other metro areas are catching up.
While New York saw $49.6 billion invested from June 2017 to June 2018, that was 3.4 percent below the previous year, according to the Cushman report: “Winning in Growth Cities.”
Los Angeles ranked second with $40.7 billion, which represented a 4.8 percent gain over the previous year.
L.A. was the strongest industrial market, according to the report. Roughly $9 billion was spent there, up 21.4 percent from the year before. The industrial market in L.A. is incredibly tight, thanks in part to its strong consumer base and access to the ports of Los Angeles and Long Beach, the two largest in the world.
Rounding out Cushman’s top five worldwide were: London ($35.4 billion, which was 12% higher), Paris ($34.6 billion, which was 42% higher) and Hong Kong ($32.5 billion, which was a whopping 67.9% higher).
The total amount of global investment excludes development sites.
New York’s retail sector actually grew nearly 31%, to $7.4 billion, according to the report. That tied it with L.A. for the second highest investment behind Hong Kong. But there are reasons why New York’s retail sector probably isn’t celebrating. A recent Douglas Elliman survey of Manhattan found that 20 percent of storefronts were vacant.
Chicago, meanwhile, camel in at No. 10 with $18.5 billion, representing a 7.2% increase from last year. That was helped by the sharp rise in industrial investment, up 41.4% to $4.8 billion. Retail investment dropped, however, by about 20% to $2.5 billion.
Miami, which came in at No. 20 with $11.3 billion, saw a 20.4% drop in total investment from the previous year.
L.A saw similar dollar figure investment in the retail sector, up 51 percent year-over-year, and a drop in office investment of 9.2 percent to $12 billion. All cities outside the U.S in the top 10 saw double digit percentage growth in investment. Investors spent $34.6 million on real estate in Paris and $32.5 million in Hong Kong — growth of 42 percent and 68 percent, respectively — putting them behind London at 4th and 5th in the world. Of all cities in the top 10, Hong Kong saw the most significant growth and one of the few to see growth across all major sectors of the market: retail, office, and industrial.