Manhattan Is No Longer the High Spot for CRE Liquidity

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Manhattan Is No Longer the Top Spot for CRE Liquidity

COVID-19 has walled the global commercial real estate market, displacing Manhattan as one of the top markets for liquid commercial real estate analysis from Real Capital Analytics.

For the first time since 2011, Manhattan fell from the top two to number three in the top global liquid commercial real estate markets. Instead, the center of Paris and Berlin were the most liquid commercial real estate markets in the world by mid-year, Real Capital Analytics reported.

While Manhattan's decline was somewhat unprecedented, it shouldn't be unexpected. For months after COVID-19 hit the United States, commercial real estate watchers have been warning of the debilitating impact on the commercial real estate market in Manhattan.

However, in the first quarter of 2020, Manhattan leases were strong in January and February, with availability falling and rents rising. However, when COVID-19 and March hit, leasing activities were suspended. GlobeSt reported. Reports began already in early April swirl Some Manhattan-based retail tenants stopped paying rent after statewide lockdowns. in the AugustLeasing activity in Manhattan picked up as prices fell, but the road to recovery was still shaky.

In this weekReal estate broker Colliers International reported that leasing activity was the lowest year-over-year leasing volume for the full year this century. Manhattan isn't the only area where commercial growth has declined, however.

According to Real Capital Analytics, market liquidity decreased in 111 of 155 commercial real estate markets worldwide in the second quarter. The number of markets with lower levels of liquidity compared to the previous quarter reflects the great recession of 2009. However, according to Real Capital Analytics, the “liquidity crisis” was more widespread in America.

Amid COVID-19 lockdowns and economic disruptions, 58 out of 64 markets in America saw lower liquidity from Q1 through Q2 of 2020. While the liquidity values ​​of Europe, Middle East and Africa (EMEA) are in 37 out of 63 markets and 16 out of 28 markets in Asia Pacific.

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