Boston has just surpassed Manhattan to surpass the borough in commercial real estate investment – a bragging right for Bentown in the historic rivalry between the two cities.
Boston was ranked as the most liquid commercial real estate market in the United States for the past two quarters, with Manhattan in second place, according to data report of Real capital analytics (RCA).
“Manhattan has been falling even longer than the last few quarters in terms of overall market liquidity,” Jim Costello– said the senior vice president of RCA.
Boston has a more competitive market, in part due to strong tech and life sciences sectors. While Manhattan has more unique buyers than Boston, Manhattan has fewer active people today than in the first quarter of 2020, while Boston has an active buyers as the report says.
“Given its size, Manhattan has more unique buyers than Boston,” Costello said. “But compared to the history of Manhattan, there are fewer active participants today than during the normal period, unlike Boston.”
According to Costello, Boston’s competitive market is driving up commercial property prices. And this competition is inspired in part by the Boston biotechnology and life sciences community.
Life Sciences Leasing in New York has reached record high in June, with 257,000 square feet of rental activity, surpassing the 2020 figure of 156,000 square feet, according to the Commercial Observer. But Big Apple has yet to surpass Boston in this sector.
However, according to Costello, Manhattan still dominates the cross-border money space. International investors like pension funds see the city as an efficient place to store money, given that the fund can unload large sums of money on high-value real estate. But according to Costello, the uncertainty caused by the pandemic hit New York harder than Beantown.
“Boston has an added boost among these growing biotech and technology industries,” Costello said. “Where there is still uncertainty about what will happen next and how people will use office space and how much, the fact that there are still several growing industries in Boston minimizes the uncertainty after COVID to some extent.” …
Costello said he was most surprised by how much Manhattan has fallen over the past year.
“Globally, Manhattan may have experienced one of the steepest liquidity downturns, and more so than other major global financial centers,” he said.