Boston, LA office landlords to benefit from “flight to quality” amid economic slowdown

Secondary cities like Austin more susceptible in downturn

National /
Mar.March 19, 2019 10:00 AM

Boston and L.A. skylines (Credit: Wikipedia)

As the U.S. economy slows, cities with more diversified economic bases stand to gain as investors move away from riskier bets.

Such cities include Los Angeles, which is seeing a tech and media boom, and Boston, where a strong biotechnology sector is supporting the city’s traditional financial-services base, Bloomberg reported.

“The focus should be on quality of market and quality of real estate,” JPMorgan Asset Management co-portfolio manager of real estate Ann Cole told Bloomberg. “As you get later in the cycle, that’s not the time to be taking additional risk.”

Secondary cities like Austin, Texas may offer higher yields, but they are often more susceptible in a downturn due to reliance on one industry or one company.

Economic growth in the U.S. is expected to slow down over the next few years, hitting a low of 1.8 percent in 2021 according to Bloomberg data, and this will correlate strongly with office-building performance.

“In every recessionary environment, there’s always a flight to quality,” Cole said. [Bloomberg] — Kevin Sun


Related Articles

arrow_forward_ios
With a cooling trade war, stocks perform well, including real estate. (Credit: iStock)

Real estate stocks push up this week as U.S.-China trade tensions ease

Real estate stocks push up this week as U.S.-China trade tensions ease
Eric Gordon

Eric Gordon on the evolution of the residential data game — and how to stay competitive in the new world

Eric Gordon on the evolution of the residential data game — and how to stay competitive in the new world
Big Tech locations in NYC

MAP: Here’s a look at all the Big Tech locations in NYC

MAP: Here’s a look at all the Big Tech locations in NYC
Clare Newman with Governors Island (Credit: Governors Island, Getty Images)

Governors Island redevelopment opposed as excessive

Governors Island redevelopment opposed as excessive
Gov. Andrew Cuomo (Getty, iStock, NY State Budget)

Cuomo proposes tax credits for restaurants, income tax increases

Cuomo proposes tax credits for restaurants, income tax increases
Blackstone's Ken Caplan (iStock; Blackstone)

Industrial now 36% of Blackstone’s RE portfolio

Industrial now 36% of Blackstone’s RE portfolio
Almanac Realty Investors managing director Matthew Kaplan (Almanac Realty; iStock)

Workforce housing investor gets $320M boost

Workforce housing investor gets $320M boost
Corcoran to sublet 50K sf in IBM Building

Corcoran to sublet 50K sf in IBM Building

Corcoran to sublet 50K sf in IBM Building
arrow_forward_ios

The Deal's newsletters give you the latest scoops, fresh headlines, marketing data, and things to know within the industry.

Loading...