New Yorkranks first as a global business center in a worldwide survey of cities, the fourth such recognition of its influence in the past five months.

London, Paris, Tokyo and Hong Kong trail New York on the Global Cities Index, released today by Bloomberg Rankings. Beijing and Shanghai emerged as potential rivals within 10 to 20 years, according to the index.

The survey examined 66 of the world’s busiest commercial urban centers, judging each on the scope of its business activity; labor force; access to media and information; cultural amenities; and political influence.

“Our goal was to find a measure that would help corporate and government decision-makers determine which of the world’s cities will best attract and shape the future flow of people, ideas, capital and goods,” said Mike Hales, a partner at A.T. Kearney, a Chicago-based consulting firm that helped Bloomberg conduct the study.

The rankings support similar findings by The Economist and Euromoney magazines, which each published studies concluding that the most populous U.S. city remained the world’s premier urban business center.

More recognition came from Singapore last month, when New York received the Lee Kuan Yew World City Prize, which recognized “leadership and achievement” in policies to conserve energy, create parks, increase public safety and plan for affordable housing.

Catalysts for Growth

“With more than half the world’s people now living in cities, and with three-fourths of the people on Earth expected to be city dwellers by midcentury, cities around the globe, including New York, must confront all the effects of this urban growth,” New York Mayor Michael Bloomberg said in accepting the award in Singapore March 21. “Such projects can also be catalysts for private-sector investment.”

The mayor is the founder and majority owner of Bloomberg News parent Bloomberg LP.

Investments in public transportation, cultural amenities, education, public safety, sustainable energy production and conservation have become major considerations as cities work to retain a competitive edge, corporate executives and government policy makers said in interviews.

More Competition

“We know that the No. 1 position we hold today is coveted and that the world is changing quickly around us, and that cities around the world are continuing to invest to strengthen their competitive positions,” said Seth Pinsky, president of the New York City Economic Development Corp., during a March 23 talk to executives at Citigroup Inc. (C) He was there to accept the honor from Euromoney, which published the rankings in its November issue.

New York may be challenged to retain the top spot. Trends that may reduce its influence include “the growing chasm between the very rich and the poor,” said James Parrott, chief economist at the Fiscal Policy Institute, a New York-based research and education organization backed by organized labor.

“It weakens our consumer base, makes it harder for the city to remain a truly open society with lots of opportunity, and — although it’s a national problem — not enough local leadership has been focused upon redressing that,” Parrott said.

Polarization in Washington, driven by “backward-looking perspectives held by people who even deny the reality of climate change, presents a risk for the city and the U.S. in competition with the rest of the world in the 21st century,” Parrott said.

Study Methodology

A.T. Kearney measured 25 variables across five criteria to calculate how 66 of the world’s largest cities stack up against one another, said Andres Mendoza Pena, a principal of the company. New York led on human capital and information exchange, though it trailed London and Paris for cultural experience.

Analysts counted accountants, lawyers, advertising agencies, management consultants, engineers and other business- service firms, and looked at how many global companies established offices there, he said.

They checked Shanghai’s Jiao Tong University ranking of universities and considered how many foreign-born residents were included in a city’s population to judge the strength of its labor force. They pored over Frommer’s, Michelin and Zagat guides, and counted museums, theaters, sporting events and restaurants to gauge cultural amenities, Pena said.

Cornell, Technion

Bloomberg has touted the city’s schools, where spending has doubled to $24 billion in the 10 years he’s been mayor, police practices that helped to reduce crime by about 35 percent since 2002 and investments in parks, museums and other cultural amenities that attracted a record 50.5 million visitors in 2011.

Consistent with those goals, the city awarded $100 million in infrastructure support and land on Roosevelt Island to Cornell University and the Technion Israel Institute of Technology after the schools won a competition to create a 1.3 million-square-foot engineering campus that the mayor said would create thousands of jobs in the next 30 years.

A.T. Kearney concluded that New York’s diverse economy, driven by media, arts, fashion, technology and finance, and its diverse labor force made the city the world’s most attractive to conduct business. In the past two years it has eclipsed Boston to become second only to California’s Silicon Valley as a source of venture capital, according to the city officials.

Rankings can’t capture some of the most important qualities that set top-rated cities such as New York and London apart, Bloomberg wrote March 27 in The Financial Times.

“For cities to have sustained success, they must compete for the grand prize: intellectual capital and talent,” Bloomberg wrote. “Talent attracts capital far more effectively and consistently than capital attracts talent.”

The mayor cited recent college graduates’ migration to the borough of Brooklyn, where inexpensive commercial and residential real estate have fostered creativity in music, art, design, food and energy-conserving lifestyles and building construction.

“Being cool counts,” Bloomberg wrote.

To contact the reporters on this story: Henry Goldman in New York City Hall at hgoldman@bloomberg.net.

To contact the editor responsible for this story: Mark Tannenbaum at mtannen@bloomberg.net

By Daniel Massey @masseydaniel
March 12, 2012 2:11 p.m.

Link: China Replaces Europe in Funding NY Properties – Bloomberg

By David M. Levitt – Mar 8, 2012

China’s oldest bank is expanding in New York lending for trophy buildings as Europe’s debt crisis sweeps away the last wave of foreign financiers.

Bank of China Ltd. increased its loans outstanding on U.S. properties fivefold to $2.6 billion since 2008, with most of that growth in New York, according to Trepp LLC, a mortgage data provider. The bank agreed last month to refinance the Mandarin Oriental hotel in Columbus Circle owned by Dubai’s Istithmar World PJSC. The Beijing-based state-backed bank is making inroads after European lenders including Anglo Irish Bank Corp., pulled out of the market, Commerzbank AG (CBK)’s real-estate lending unit stopped competing, and Societe Generale (GLE) SA pared assets.

Irish, German and French banks have led the retreat from the world’s most active commercial property market as regulators urge lenders to shrink their balance sheets to meet stricter capital standards at the same time Europe’s debt crisis roils credit markets. Replacements, such as Bank of China, may benefit as New York property owners have to refinance more than $18 billion of commercial mortgages bundled into bonds in the next two years, according to data compiled by Bloomberg.

“Right now, commercial real-estate lending is offering a good risk-adjusted return for lenders,” said Dan Fasulo, managing director at Real Capital Analytics Inc., which tracks commercial property sales worldwide. “This should be a time where lending would help your balance sheet, versus government bonds, which are not paying anything.”

Bond Levels

Investor confidence in U.S. commercial real-estate debt is at the highest level since May amid signs the economy is improving, including an unemployment rate that declined to 8.3 percent in January from 10 percent in 2009. Relative yields on top-ranked commercial-mortgage bonds have narrowed 75 basis points this year to 186 basis points, or 1.86 percentage points, according to a Barclays Plc index.

Bank of China, the country’s third-largest lender by assets, has accelerated its efforts in the U.S., with eight loans in the last year totaling almost $1.8 billion, according to data from Real Capital. Six were on New York properties, including a $260 million five-year loan on 3 Columbus Circle, a 768,565-square-foot tower (71,402-square meter) a block from Central Park owned by SL Green Realty Corp. (SLG) and the Moinian Group.

The loan pays 2.1 percentage points above the London interbank offered rate, a lending benchmark, according to SL Green, the biggest owner of Manhattan skyscrapers.

Mandarin Oriental Loan

“We’ve developed a very good relationship with the Bank of China,” said Isaac Zion, co-chief investment officer for SL Green. “We’ve done a few deals with them and hope to do more.”

The bank last month agreed to lend $175 million to Istithmar Mandarin Oriental hotel. That repaid a $135 million obligation arranged in 2007 by Column Financial, the commercial mortgage lending unit of Credit Suisse Group AG, according to data compiled by Bloomberg. The Swiss bank said in October it was pulling out of originating commercial mortgages to be packaged into bonds.

Bank of China’s New York-based first vice president, Raymond Qiao, who leads its U.S. mortgage lending program, declined to comment, as did Steven Vames, a spokesman for Credit Suisse.

Moving in the other direction, Irish banks were forced from the market in 2009 when they were nationalized after real-estate losses globally.

‘Temporary Embargo’

Anglo Irish last year sold $9.65 billion of its U.S. real- estate loans to JPMorgan Chase & Co., Wells Fargo & Co. and Lone Star Funds for an average of about 80 cents on the dollar, two people familiar with the sale said in August. The Dublin-based lender, which financed the Upper West Side’s Apthorp apartment complex in 2007 for $360.7 million, was renamed Irish Bank Resolution Corp. and will be wound down over a decade.

Eurohypo, the real-estate lending unit of Commerzbank, has placed a “temporary embargo on new business” through June, according to an e-mailed statement from Gisela Brandhoff, a spokeswoman for the lender. Its loans to U.S. property owners have declined by $1 billion to $3.6 billion since the third quarter of 2009, according to Trepp.

“In line with Commerzbank’s strategy to reduce Eurohypo assets globally, the bank is also seeking to reduce assets in the U.S.,” Brandhoff said in the statement. “The European Banking Authority’s stricter capital requirements for banks marked a turning point for the financial sector and for us.”

Basel III reforms being implemented are requiring banks to keep larger reserves against their more speculative investments, thereby forcing them to be more cautious in foreign markets, said Steve Collins, managing director of the international capital group at Jones Lang LaSalle Inc. (JLL), the world’s second- biggest publicly traded real estate brokerage.

Sovereign Debt Crisis

Banks are also constrained because of concerns they may take losses should a European nation default, he said.

Paris-based Societe Generale’s book of U.S. commercial mortgages has declined by 89 percent in the past two years, Trepp data show. France’s second-largest bank agreed to sell $600 million of commercial property loans to Macquarie Group Ltd. (MQG) in November. James Galvin, a New York-based spokesman for Societe Generale, declined to comment.

One European bank that hasn’t cut back on its U.S. lending is Deutsche Bank AG (DBK), which was lead manager on $6.3 billion of loans marked for the commercial mortgage-backed securities market, beating J.P. Morgan for first place, according to rankings published Jan. 6 by Commercial Mortgage Alert, a trade newsletter.

The Frankfurt-based bank in December agreed to a $625 million loan for Sheldon Solow on his 9 West 57th Street office tower, overlooking Central Park.

Insurance Competition

Those still in the market have to compete with insurers such as MetLife Inc. (MET) that have a cheaper cost of capital, said Collins.

“The life companies are crushing” European banks, he said. “They’re not seeking out new business, just maintaining the status quo.”

Bank of China isn’t the only lender from the region expanding in the U.S.

Singapore’s United Overseas Bank Ltd. (UOB) increased its U.S. commercial lending to about $1.1 billion, a 178 percent jump over two years, Trepp data show.

Zion of SL Green said the Singaporean firm is a “relationship lender” interested only in specific high-quality buildings and borrowers. The bank paired with Wells Fargo to finance the acquisition of the Prada store at 724 Fifth Ave., the world’s most expensive shopping street, by an SL Green joint venture.

The New York branch of Hong-Kong-based Bank of East Asia Ltd. (23) jumped to $1.1 billion of real estate loans outstanding, an 87 percent increase over two years.

“China, despite the global economic turmoil, is still running a significant surplus and has capital that needs to be put to work around the world,” said Fasulo. ”It’s actually opportunistic for the market to have them around. It softens the blow from the bunch of European lenders that left the market, and added depth to the Manhattan lending market.”

To contact the reporter on this story: David M. Levitt in New York at dlevitt@bloomberg.net

To contact the editors responsible for this story: Daniel Taub in Los Angeles at dtaub@bloomberg.net; Rob Urban in New York at robprag@bloomberg.net

February 29, 2012
By ANITA LIKUS | Special to the WSJ

European property buyers are starting to shop for real estate in the U.S., and New York in particular, as tough competition and economic uncertainty drive them out of their home markets, industry participants say.

Investment by Europeans in the U.S. ground to a virtual halt during the financial crisis in 2008, but deals are picking up again and U.K. buyers are set to lead the way, experts say.

“Now, more than ever, the U.S. is attracting even more EU capital in search of a more safe and secure investment,” says Steve Collins, the Washington-based international director at property-services company Jones Lang LaSalle.

U.K. insurance and investment company Legal & General Group PLC and AXA Real Estate, a unit of French insurance company AXA SA, have both said they are planning to look for investment opportunities in the U.S.

European investors bought $1.6 billion worth of real estate in the U.S. in 2011, more than double the $700 million they invested in 2010, according to data from Jones Lang LaSalle. While the figure is still far below the $8.4 billion bought in 2007, it shows activity is picking up.

Andrew Brecher, senior partner of London-based property-law firm Brecher Solicitors, says he is increasingly asked by U.K. companies to look for assets in New York.

“Investors are currently looking to divert money from the euro zone,” he says. “U.K. property companies are finding it hard to find value and are being forced to look elsewhere.”

U.K. companies bought $638.8 million of real estate in New York last year, up from $295.6 million in 2010, according to data provider Real Capital Analytics. U.K. buyers in New York include private companies, family offices, funds and institutions.

These purchases included the $346.8 million Bertelsmann Building office tower in Manhattan, bought by a joint venture between London-based HSBC Alternative Investments and U.S.-based Edge Fund Advisors in the third quarter of 2011; the $144 million office building at 3 Columbus Circle, bought by advertising firm WPP Group ; and private developer and investor Epic UK Ltd.’s $48.74 million purchase of a retail building at 25 West 14th Street.

Prices of trophy New York properties increased sharply last year, pushing values within reach of their pre-recession highs. But some say the market is cooling because a contraction of the financial-services industry is putting downward pressure on rents and occupancy rates.

Also, the lower purchase prices in New York come with lower rents. London office rents range from £55 ($87) per square foot in the financial district, the City, to £95 in the West End commercial center. In New York, office rents range from $43 per square foot downtown, in the World Trade Center area, to $70 per square foot in midtown, around Times Square. Competition among retailers, who want floor space on London’s most prominent shopping streets, is also fierce. Paul Endicott, director of retail at property-services company Savills, says that rents and property prices on London’s Bond Street are advancing strongly, with yields falling below 3%, and will continue to do so.

While New York attracts a fair share of foreign money, competition among buyers isn’t as intense as in London, where cross-border investment is higher than domestic investment. For example, Middle Eastern investors bought $5 billion worth of property in London in 2010 and 2011 combined, but only around $1 billion in New York, according to data from Jones Lang LaSalle.

“Many U.K. property investors are now questioning the point of bidding against offshore money in London,” Mr. Brecher says. “Whatever you are buying in New York will cost 25% less than in London, while the quality of the investment is arguably as good, so U.K. private companies have to look across the pond.”

Also, New York is attractive to foreign investors because of its status as one of the world’s top cities, alongside London, Paris and Tokyo. While investors pumped $24.3 billion into London real estate in 2011, the figure was only 15% higher than in the previous year. New York saw $19.2 billion of investment in property in 2011, 75% higher than in 2010, making it the most active city after London. Paris and Tokyo lagged behind, with $14 billion and $13.9 billion, respectively, according to data from Jones Lang LaSalle.

A typical New York building includes retail units on the ground floor, offices above and residential apartments at the very top. Often, the different pieces can be bought and owned by separate investors, which rarely happens in London.

For example, Spanish retail giant Inditex , which owns the Zara chain of clothing stores, bought the former NBA store on Manhattan’s 5th Avenue from private-equity fund Carlyle Group for $324 million at the start of last year, while the offices in the building were purchased by U.S.-based Vornado Realty Trust at the end of last year.

“In New York’s commercial market you can go in for a little or for a lot and get a good income stream,” Mr. Brecher says.

And while the cost of borrowing is similar in New York and London, at about 4%, U.S. investments will offer better yields, he adds. “Good-quality commercial property in Manhattan will yield investors between 4% and 6%, while the same type of property in London will only generate yields of between 2.5% and 3% on top shopping streets.”

(PDF) Plan B for China’s Wealthy: Moving to the U.S., Europe

http://online.wsj.com/article/SB10001424052970203806504577181461401318988.html

BEIJING—This time last year, Shi Kang considered himself a happy man.

Writing 15 novels had made him a millionaire. He owned a luxury apartment and a new silver Mercedes. He was so content with his carefree life in Beijing that he never even traveled overseas.

Today, a year later, Mr. Shi is considering emigrating to the U.S.—one of a growing number of rich Chinese either contemplating leaving their homeland or already arranging to do it.

“Things are real there,” says Mr. Shi, who has been trying to learn English by listening to language CDs in his car. “Here you don’t know what to believe.” He adds: “I like China a lot. But if I have kids, I wouldn’t necessarily want them to live in China.”

With a fortune of at least $1.6 million, Mr. Shi is part of the wealthy elite that benefited most from the Communist Party’s brand of capitalism. He is riding the crest of arguably the biggest economic expansion in history.

And yet, while the party touts the economic success of the “Chinese model,” many of its poster children are heading for the exits. They are in search of things money can’t buy in China: Cleaner air, safer food, better education for their children. Some also express concern about government corruption and the safety of their assets.

The movement represents the fraying of an unwritten social contract between the Communist Party and China’s citizens that has held the nation together through wrenching changes since Deng Xiaoping launched market reforms in 1978: The rulers deliver economic growth; the ruled make few political demands. The underlying message seems to be that after three decades of rising prosperity, wealthier Chinese are either looking beyond their economic gains, or taking them for granted, and now crave improvements in their quality of life.

It is happening just as the ruling Communist Party prepares for its once-a-decade leadership change in October or November, when a generation of leaders led by current President and party chief Hu Jintao is expected to start retiring.
The elite exodus is a potentially troubling development for party leaders, many of whose relatives have long since chosen to live or study overseas. Vice President Xi Jinping, who is expected to succeed Mr. Hu and who visited the U.S. last week, has a daughter at Harvard, an ex-wife in Britain and a sister in Canada.

So what changed Mr. Shi’s mind? A year ago, for the first time, he traveled outside China. Initially he just planned to visit a girlfriend studying in New Jersey, but he ended up buying a BMW X3 sport-utility vehicle and doing a 40,000-mile road trip around the U.S.
His first impressions weren’t good: He lost a bag at a New York City airport and thought New York was a “trash city” at first. But when he headed into the countryside, with Beethoven blaring on the stereo, he had something of an epiphany.

“As soon as you leave the city, the U.S. is really a big garden,” said Mr. Shi. “It’s like a symphony: When Chinese people listen to these idyllic pastoral tunes, they can’t picture it, because China just doesn’t have these things.”

Mr. Shi, 43 years old, is famous in China for novels like “Loafing Around,” documenting the dissolute lives of young Beijingers in the 1980s. His 2007 book “Strive” was turned into a hugely popular television series.

As he toured the U.S., he wrote about it on his micro-blog (a Chinese version of Twitter) which now has more than 800,000 followers. He dwelt in detail on the relative affordability of a large house with a garden.

Some readers accused him of being anti-Chinese. But his sentiments are common among China’s wealthy, now estimated to include about one million millionaires (in dollar terms), and 150 to 300 billionaires, according to various studies.
A survey published in November found that 60% of about 960,000 Chinese people with assets over 10 million yuan ($1.6 million) were either thinking about emigrating or taking steps to do so. The U.S. was the top destination, followed by Canada, Singapore and Europe, according to the survey by the state-run Bank of China and Hurun Report, which analyzes trends among China’s wealthy.

Most people cited their children’s education as the main reason, followed by concerns over air quality, food safety and financial security. Another survey last year, by management-consulting firm Bain & Co. and state-run China Merchants Bank, showed similar results.

Recent statistics show rising demand for “investment immigration” visas to the U.S., Canada and other Western countries. The U.S. program, EB5, can grant up to 10,000 visas annually to people who invest $1 million and create at least 10 jobs in the U.S., or invest $500,000 in a rural or high-unemployment area.

In fiscal 2011, the U.S. received 2,969 applications (each of which can cover several family members) from China for EB5 immigration, compared with just 787 two years earlier, according to the U.S. immigration agency. Chinese applications accounted for 78% of the global total in 2011.

Canada received 2,567 Chinese applications for a similar program in 2011, up from just 383 in 2009, according to its immigration authorities. Demand has been so strong—particularly from China—that Canada imposed a cap of 700 applications per year, starting July 1, 2011. That quota was filled within a week, with 697 of 700 applications from China.
China’s officialdom has taken notice. “Without doubt, the skyrocketing living costs, worsening environment, poor social welfare and growing tax burden in China are partly responsible for this loss,” wrote Zhang Monan, an economic researcher with the official State Information Centre, in a recent commentary in the state-run China Daily.

“It is natural for people to choose a place to live where they think they will enjoy the best quality of life,” she wrote. “Only by making the country more attractive to its talent can China keep them and their wealth from leaving.”

Party leaders have begun pledging to focus more on quality-of-life issues. Last year, for instance, they promised to pay more attention to improving public services and solving environmental issues in the current five-year plan that runs until 2015.

But some millionaires aren’t hanging around until then. Su Bin is sending his wife and son to Vancouver this year and aims to head there himself soon afterward. The son of an army officer, he started his career in 1986 working in an aircraft-design institute in Beijing. He recalls passing through Tiananmen Square on his way back from work in June 1989—just before China’s historic crackdown on protesters there—and being hustled away by Liu Xiaobo, who would later win the 2010 Nobel Peace Prize.

Mr. Su was no dissident, though. Like many of his generation, he turned his attention to getting rich. Today, at 46, Mr. Su runs his own aerospace technology company and estimates his own net worth, including the various properties he owns, at around 80 million yuan, or close to $13 million.

His main reason for leaving, he says, is the business environment. “The government has too much power,” he says. “Regulations here mean that businessmen have to do a lot of illegal things. That gives people a real sense of insecurity.” He said four of his distributors have also applied for investment immigration to Canada.

The second reason he lists is the education of his son, whom he wants to learn to speak English and think more freely. Mr. Su says he was struck by this when the boy first came home from his state-run primary school wearing the red scarf of the “young pioneers,” a Communist equivalent of the scouts that recruits most children between the ages of 7 and 14, and requires them to sing revolutionary songs and pledge allegiance to the party.

“I told him to take it off, but I couldn’t explain to him what it meant,” he said.

Mr. Su lived briefly in Canada in 2003, but returned after just a few months, in large part because he discovered the only job he could find was as a car salesman. A decade on, he worries not about earning money but preserving it.

“The problem is that government power is too great,” Mr. Su says. “When the economy is going up, they think that everything they are doing is right.” If they don’t change, he worries, “another revolution will come soon.”

Of course, some people who say they want to migrate may never do so. And some analysts point out that the movement of wealthy people from China may also be a natural consequence of three decades of China’s high growth, mirroring the outflow from Hong Kong and Taiwan from the 1960s onward.

Nonetheless, there are signs the exodus has touched a nerve among Chinese leaders. State-media mouthpieces including People’s Daily and the Xinhua news agency have published a series of articles warning that applicants for investment immigration to the U.S. could lose their money. China Youth Daily warned that “this free lunch could be a trap.”

Migration has long been a sensitive political issue in China and a telling indicator of the national condition. The Qing dynasty, which ruled China from 1644 to 1912, was so opposed to Chinese living abroad that it banned citizens from settling in foreign countries. (The penalty was beheading.) Despite that ban, in the 1840s tens of thousands fled to the U.S. to escape the chaos that followed China’s defeat by Britain in the First Opium War. Many ended up joining the California Gold Rush or helping to build the first transcontinental American railroad.

More recently, the Communist Party also banned emigration when it took power in 1949; that ban was lifted only in the 1980s. After that, a new generation of migrants came to the U.S., this time to study or earn money, although many chose to return to the booming China in the 1990s and 2000s.

The current migrant wave is different in that they are escaping neither poverty nor political unrest—and many say they are leaving for good. The Hurun survey showed that the average respondent had 60 million yuan in assets and was 42, old enough to remember the 1989 Tiananmen crackdown, but young enough to have learned how to prosper in a market economy.

Deng Jie fits the profile. Twenty-seven years ago, in the fledgling years of China’s market reforms, he began his career in a state-run ceramics factory in Beijing, sharing a cramped dormitory with colleagues and earning 50 yuan a month (about $13 in those days).

Today, at 48, he runs his own chemical pigments business and lives with his wife and daughter in one of the three luxury apartments he owns. In dollar terms, he is a millionaire several times over. His properties alone have appreciated by 800% in a decade.

Yet the hope he felt for his country in the 1980s, he says, has “been doused with bucket after bucket of cold water.” He cited a host of concerns, including rampant corruption among the officials he deals with, and new labor regulations that he says have made his work force too costly and demanding.

“I’m representing a lot of other people like me,” he says. “We used to want to contribute to the nation. But now we just feel so disappointed. China cannot continue like this. It has to change.”

This year Mr. Deng plans to move to Canada, where his 18-year-old daughter is applying to Brock University, near Toronto. He intends to live nearby. “I want her to have an international education, and eventually to live in Europe,” he says.
Write to Jeremy Page at jeremy.page@wsj.com

Looks like New York City’s expected 50 million tourists this year will be spoiled for choice when it comes to hotel accommodations, though they shouldn’t expect the increase in supply to do much to bring down the price.

Though city’s Top 25 hotels added just 56 rooms in the past year, according to a list of largest hotels in this week’s issue of Crain’s, the city’s overall room inventory grew by 5% in 2011 to 90,000 rooms. This is on par with the growth in 2010, but it is nearly double the increase posted in 2008, according to data from NYC & Co., the city’s official tourism arm.

In all, the city saw at least a dozen new hotels bow in 2011, with no less than 40 more expected to follow in the next 30 months. Some of the city’s newcomers include Mondrian SoHo in February, the Four Points by Sheraton in May and Hyatt 48Lex in August.

The city’s largest new hotel is YOTEL New York. Located near Times Square, the hotel has 669 rooms, enough to earn it the rank of New York’s 23rd biggest hostelry on the Crain’s list. YOTEL, which bills itself on its website as a “first class experience at an affordable price,” delivers on that promise in part by offering smaller rooms, which are about 170 square feet.

YOTEL caters towards the “young at heart,” said Gerard Greene, the CEO of YOTEL New York. The hotel operated at 80% occupancy in 2011; its rooms cost an average of $200. The city’s overall occupancy rate for the year was 85%, according to NYC & Co., close to its pre-recession peak.

“If you can make it in New York, you can make it anywhere,” said Mr. Greene. The hotel opened at West 42nd Street and Tenth Avenue in June, and was the only new hotel to appear on the Crain’s list. “Hotels here are run by big boys, and it’s difficult to come in and take on the market.”

Indeed, most of the hotels on the Crain’s list—which include a smattering of Hiltons and Hyatts—are run by hotel conglomerates. The biggest hotels were Hilton New York, with 1,981, followed by New York Marriott Marquis with 1,949 rooms, and Sheraton New York Hotel and Towers with 1,780 rooms.

More hotels are popping up now, thanks to the strong hotel market in 2006 and 2007. “The process from when a hotel becomes a gleam in someone’s eyes to when it opens its doors is about three years,” said John Fox, a senior vice president of PKF Consulting USA, adding that in light of today’s strong market, developers are again starting to think about creating new hotels.

Among the most popular hotels are those with sleek designs—like YOTEL—and/or less expensive rooms, Mr. Fox added.

Over the last five years, New York has seen a 24% increase in room volume, according to NYC & Co, including an unusually large number of additions in the outer boroughs, where 7,200 rooms were added in the period. Among the new arrivals are Brooklyn’s Hotel Williamsburg, which opened in November, and Z NYC Hotel in Long Island City, Queens, which opened in July.

Though occupancy rates hit 85% in 2011, just shy of the 86% peak in 2007, average room rates gained only about 5% in 2011 from the year earlier, according to PKF Consulting. As new rooms are added, the hotel consultant expects that the occupancy rate will decline by about 1% in 2012.

“With these newer properties, supply will increase more than demand,” Mr. Fox said.

Among the Top 25 hotels last year, prices rose at three of the five biggest hotels. The highest room rate on the list was found at the Grand Hyatt, the city’s fifth largest hostelry. There, room rates rose 20% from last year to a high of $599.

Read more: http://www.crainsnewyork.com/article/20120210/HOSPITALITY_TOURISM/120219994#ixzz1mNc2SHwf
More rooms at more inns loom in NY’s future _ Crain’s New York Business

The city attracted the most commercial property investment worldwide with a total of $39.8 billion recorded in the past 12 months, according to a new report by Savills, a real estate services firm.

The total amount invested in New York City commercial real estate soared 165% over the level of the previous 12-month span. That was enough to edge out runner-up London, where sales totaled $34.9 billion. Beijing, Shanghai and Tokyo rounded out the top five on the list.

At $39.8B, NYC is No.1 in Global Property Sales

At $39.8B, NYC is No.1 in Global Property Sales (PDF)

Chinese Investors and US Hotels: A Rising Tide of Opportunity

Chinese Investors and US Hotels: A Rising Tide of Opportunity (PDF)

Recently, though, other types of investors — most notably management companies, private equity firms, government investment arms and hedge funds — have edged into the New York market, convinced, it seems, that hotel values in the city still have a ways to climb. That is despite the fact that hotels have already rapidly risen in value after taking a severe recessionary beating in 2009.

Hotel Investments: Inn Fashion

Hotel Investments: Inn Fashion (PDF)