According to an article in CBC.ca, Canadians have been the largest investors into Manhattan real estate so far this year. Figures from Real Capital Analytics show Canadian investors have bought $3.85 billion of US property this year.
This is much higher than the $1.97 billion worth of property bought last year. The biggest investors were the real estate departments of pension funds, for example the Canada Pension Plan Investment Board and the Ontario Municipal Employees Retirement System and Caisse de dépôt et placement du Québec were amongst the biggest investors, buying $581 billion of managed property in New York. Even though property in Manhattan is highly priced, experts point out that there is always someone who is willing to buy such an asset in New York. Canadian pension plans have large amounts of capital and are looking for long-term investments that will provide a stable return either from capital growth or from operating income.
The real estate Department of the Caisse is Ivanhoe Cambridge Inc. and it owns approximately $7 billion of US properties which include the headquarters for Robert Murdoch’s 21st Century Fox. Ivanhoe Cambridge Inc. was also part of a consortium that in January paid $2.2 billion for 1095 Avenue of the Americas which was purchased from the Blackstone group. A number of Canadian companies are also involved in Manhattan property development.
Brookfield Property Partners which has an extensive worldwide property portfolio is currently building an office complex called Manhattan West which is near the 9/11 memorial. Oxford Properties Group Inc. is part of the group currently redeveloping part of the New York waterfront. The development is called Hudson Yards and will ultimately result in 17,000,000 ft.² of residential and commercial space.
Canadian pension funds and real estate companies have been among the largest purchases of Manhattan property during the past 10 years followed by the UAE, China and Israel. Other foreign investors include Norway’s sovereign wealth fund which has about $4.9 billion of US property while the Qatar Investment Authority owns $4.5 billion of US property.
Commercial real estate in the US has more than doubled in price since hitting a low point in 2010 while Manhattan real estate has performed particularly strongly as residential property is at a premium. At the moment the strong US dollar is promising a greater return for Canadian buyers compared with other investments such as stocks and bonds that can have low returns.