What’s Happening in the US in 2018?
JUNE 5, 2018
I travel to the US each year and spend a week working in New York and a week in San Francisco. Why? Because these two cities set the pace in global real estate and business respectively. I observe & learn about what makes them tick so I can determine if there are opportunities in Australia, particularly in our global cities, Sydney and Melbourne.
This year I also investigated Boston to learn more about one of our clients, Pembroke and I paused for a day in Omaha to attend the Berkshire Hathaway AGM to hear Warren Buffett and Charlie Munger outline their plans for the US$500 billion investment juggernaut.
I am fortunate because my company, Knight Frank is well represented across America. It is known in the US as Newmark Knight Frank and has large teams of brokers, tenant representatives and the best research available. I can be instantly connected to the pulse in these markets. I have to say it is amazing and I learn so much. I’ve got really great colleagues and they show me what’s going on, why it matters and they make learning fun. If I need to connect an Australian landlord to an international tenant I can and do.
Phil Mahoney (Vice Chairman of Newmark Knight Frank) at Nemark Cornish & Carey offices in Santa Clara
Apple Park Visitor Centre
Americans and Aussies have an enormous amount in common so it is not difficult to make acquaintances. On each occasion I visit the US I return with at least two new business opportunities. I put this down to the American history. The frontiers of USA were built on the hard work and progress of adventurous trailblazers. Consequently these characters love traveling salespeople, which is what I am. Aussies do what most Americans dream of, we are prepared to travel, something that they would like to do, but haven’t. Of course we have the advantage that our planes are much faster than theirs, our flights arrive in a matter of hours whereas their flights to Australia take days (I jest).
New York is known as the capital of capital and we rate it as the No 1 city in the world, according to our Knight Frank City Wealth Index 2018. NY took out the No.1 position overall as well as the No.1 position across all categories – Wealth, Investment, Lifestyle and Future. In terms of real estate, a two level apartment at 220 Central Park South is currently for sale at US $250 million and Google have acquired Chelsea Markets at 75 Ninth Ave for US $2.4 billion. These are eye watering numbers and breath taking results.
There isn’t a bad part of Manhattan anymore just areas with more and more upside. It is all about prosperity, big thinking, investment and returns. Night and day are irrelevant and so too is work / life balance. How could you possibly find that “in a city that never sleeps”?
NY is about sacrifice for rich rewards and that’s why so many people don’t make it. It’s why even surviving is hard. As Frank Sinatra sang “If I can make it there I’m gonna make it anywhere”. Alicia Keys sang “a concrete jungle where dreams are made of, there’s nothing you can’t do”. These songs are stories and warnings, New York will eat you alive so you have to be sharp at all times. A concrete jungle is apt. In Africa animals are either looking for prey or being preyed upon and that’s the similarity, eat or be eaten New Yorkers…
Blaine Ford, Community Manager for WeLive, Wall Street NYC
My colleagues tell me that an average salary of $80k pa means that half will go in rent. Accommodation is small and expensive. Our research shows that US $1m or AUD $1.33 m buys you just 25m2 of apartment living (that’s student accommodation proportions). Small isn’t good either because there is not lots of community space. There are 70 parks in NY and those parks make an area exclusive. Everywhere else, public space is used and there is really nowhere to stop. There’s no café society like Australia where business tolerates patrons loitering. You are either transacting or wasting time, so keep moving.