Residential

The Three Biggest Property Owners in New York City

New York City’s real estate values continue to steadily increase, the demand being brought on by foreign investment. Find out which companies are large enough to provide a supply of real estate and how they’re doing it.

Some of the largest owners of property in New York are private family firms, trusts, and major universities. With many growing larger over time as they begin taking over entire neighborhoods. Finding information on the real estate portfolio of large companies can be difficult. Often, they do not want to claim the amount of property they own. The three New York City property owners with the most property are the New York City government, Vornado Realty Trust, and SL Green Realty.

The New York City Government

The New York City government owns 66% of all property in New York City. An estimated 362.1 million square feet. More than most other top real estate owners combined. Out of an available 546 million square feet. However, this does not mean they own all available real estate. As the entirety of the city takes up 5.5 billion square feet. The number of buildings and/or vacant parcels the government owns is 4,941. The government is not a contender when it comes to the amount of revenue it produces through these buildings. Due to the fact that the revenue produced is not in direct relation to the real estate market.

New York City Hall photo by: Momos
New York City Hall photo by: Momos

Vornado Realty Trust

The trust is a real estate investment trust (REIT) owning more than 29.7 million square feet. The number of buildings and/or vacant parcels Vornado Realty Trust owns is 77. Vornado Realty Trust reports an income of 1.17 billion, which only comes in short of SL Green Realty’s income.

1540 Broadway, owned by Vornado Realty Trust by Jorge Láscar
1540 Broadway, owned by Vornado Realty Trust by Jorge Láscar

SL Green Realty

The company owns 28.7 million square feet in New York City. Many of these companies own property outside of New York as well, which means their numbers could be much higher. The number of buildings and/or vacant parcels SL Green Realty owns is 73. Of the three, SL Green reports the highest incomes at 1.44 billion.

800 Third Avenue, owned by SL Green Realty photo by: Tdorante10
800 Third Avenue, owned by SL Green Realty photo by: Tdorante10

As of recently, SL Green Realty has begun getting rid of properties. This is to lower the costs of their shares before they begin buying them back. An investment strategy which initially appears counter-productive. Their unloading of assets is very insignificant compared to their number of acquired assets over the past five years. However, this could also be a sign of two things, either there are plenty of buyers or there is plenty of supply on the market.

The New York Real Estate Market

New York City’s real estate has continued to hold strong and is seeing one of its strongest leasing quarters in the past 3 years. However, there has been no noticeable increase in investment sales. The current market prediction is that trades could pick up before the year ends. The belief is that the steady increase in price leaves those who currently own properties worried about selling them too soon.

Meanwhile, buyers are concerned about buying when prices are high. The value of real estate continues to rise as the population increases. In addition, the demand for real estate in New York is higher than ever. The increased demand of areas to develop means prices are also seeing steady growth.

Lately, condo-ops have become more profitable than condominiums overall. Allowing real estate companies to purchase buildings and break them up into smaller pieces. As has been regularly seen throughout New York. Smaller properties generate a better return of investment. Landlords investing in smaller properties can build real estate empires in a couple of years. The proper approach to the market can make all the difference in the speed at which a real estate portfolio grows.

Supply and Demand of Real Estate in New York

New York’s shortage of large development sites as of recently has led real estate companies into areas like the South Bronx. Previously, most developers would not travel outside of Manhattan. However, they understand now that improving areas nearby may prove to be profitable as time passes. Real estate investors who learn to predict the next market hotspot tend to be the wealthiest. Finding areas which are trending or on the rise. Signs of areas which are being prepped for growth are improving transportation, progressive laws, and more real estate friendly policies.

In addition, more development companies are reaching further into the boroughs to redevelop areas. This increase in demand is benefiting the market value of properties across the boroughs. The boost in demand appears to be in direct connection with the increase of foreign investment. Meaning more money is flowing into New York from outside of the country than ever before. Another factor contributing to the increase in demand is buyers who finance using equity. This means that buildings tend to stay off the market. Long-term holders of property are becoming more and more common. Making the supply of real estate scarcer, increasing development costs.

These increases in development costs are making investors more cautious. Securing smaller projects at faster rates. Making real estate companies more aggressive in their purchases. Real estate is being more efficiently used with space sharing and multi-family buildings. Which increases the profitability of any given area. The increase in demand and foreign investment means New York City real estate is one of the safest investments in the real estate market.

 

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David Farron is the Co-Founder and CEO of InternationalRealEstate.News. A seasoned data analyst, he is an expert in international financial markets and has managed sizable budgets for a myriad of programs, including for UBS and Bloomberg. As an entrepreneur, his vision is to create a multidisciplinary platform that optimizes the best of technological applications and human talent to the benefit of the international real estate market.

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