Commercial property yield in New York (Manhattan) is driven by price point. The lower price point properties, less than $20 million, generally have an asking price at a 5 percent yield.
The higher price point commercial properties, more than $30 million, would have a higher yield , perhaps 8 percent or more. Reason is that at a higher price point, there are fewer players which decreases demand. Also, buyers at the higher price point are often institutions that put a lot more pressure on sellers from a pricing perspective.
The value of commercial property is driven by yield. Similar to a stock's PE ratio. The more the landlord can obtain in rent, the higher the value because a set multiple, in this case rental yield, would be applied.
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Visit our website http://www.castle-avenue.com/ to learn more about buying New York commercial or residential investment property. We focus on local, overseas and international investment property clients.
Wei Min Tan is a real estate broker and investor focused on investment property in Manhattan, New York. He can be reached at tan@castle-avenue.com
Showing posts with label Yield. Show all posts
Showing posts with label Yield. Show all posts
Friday, January 15, 2010
New York Property Yield
New York property (Manhattan condo) as an investment would have a gross rental yield of 4 to 5 percent. After paying for common charges and taxes, the net rental yield reduces to about 3 to 4 percent.
Manhattan, New York property is not a yield but rather an appreciation game. An investor buying New York property focuses on the long term appreciation potential. Demand for Manhattan property is global, coming from all over the world. Manhattan is a brand and the vacancy rate is less than 2 percent, relative to the US's 10 percent average. Inflation would mean rents and property values will increase.
A yield strategy in the US would mean investing in a midsize of small city. For example, Syracuse, New York is a college town with a yield of 10 to 15 percent. From personal experience, the appreciation from a city like Manhattan New York far outweights the rental yield cashflow from a midsize of small city.
Our website Castle Avenue Partners - Manhattan investment properties
Historical price appreciation
New York Property ROI
New York Property Yield
Manhattan, New York property is not a yield but rather an appreciation game. An investor buying New York property focuses on the long term appreciation potential. Demand for Manhattan property is global, coming from all over the world. Manhattan is a brand and the vacancy rate is less than 2 percent, relative to the US's 10 percent average. Inflation would mean rents and property values will increase.
A yield strategy in the US would mean investing in a midsize of small city. For example, Syracuse, New York is a college town with a yield of 10 to 15 percent. From personal experience, the appreciation from a city like Manhattan New York far outweights the rental yield cashflow from a midsize of small city.
Our website Castle Avenue Partners - Manhattan investment properties
Historical price appreciation
New York Property ROI
New York Property Yield
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