International capital never left New York City multifamily \u2014 and it\u2019s not going to anytime soon.<\/p>\n
Despite facing national uncertainty from the Trump administration and local headwinds from the incoming Mamdani administration<\/a>, foreign investors from the likes of Asia, Europe and the Middle East are still driving the city\u2019s multifamily investment sales.<\/p>\n SEE ALSO: Brookfield Fund Sells Inland Empire Warehouse for Over $120M: Sources<\/a><\/p>\n In fact, overall foreign sales volume doubled during the first half of 2025<\/a> compared to the same period last year, while multifamily sales volume, specifically, reached more than $7 billion<\/a> during the first nine months of 2025, according to data from Ariel Property Advisors<\/a>. Meanwhile, global firms represented 15 percent of all multifamily transaction bidders in New York City during the first nine months of the year, with global firms representing 31 percent of all winning multifamily bidders, according to JLL<\/a>.<\/p>\n Where are these foreign buyers coming from? Mostly from Japan, South Korea, Canada, China, Australia, Germany, Argentina and Israel, according to industry leaders. And why has foreign investment in New York City\u2019s multifamily properties stayed so strong coming out of COVID-19? It\u2019s simple: New York City is still the place where people want to live and work.<\/p>\n \u201cNew York City has a tremendous amount to offer investors when it comes to fundamentals,\u201d Shimon Shkury, president and founder of Ariel Property Advisors, told Commercial Observer. \u201cThe universities are here, the employers are here, the employees want to be here. There\u2019s a tremendous amount of job growth that has been taking place.\u201d<\/p>\n It\u2019s true \u2014 a recent report from JLL found New York City is the No. 1 destination for college graduates, accounting for a 10.9 percent share of the country\u2019s 2025 grads as they took jobs in finance, accounting, consulting, technology, life sciences and media. In addition, approximately 600,000 students attend the 110 local colleges and universities in New York City, which is also a top destination for international students, according to JLL.<\/p>\n \u201cIn terms of rent growth and supply, and, really, just actually the quality of the product, there\u2019s heightened demand and continued demand of people wanting to live in New York,\u201d said Rob Hinckley, a senior managing director of capital markets at JLL. \u201cFor undergrads and grads coming out of school, the No. 1 destination, by far, is New York. That\u2019s a good indicator of the demand level for apartments in the city.\u201d<\/p>\n Tech is another reason why foreign investors are keeping their money in New York City.<\/p>\n Both New York City and San Francisco are experiencing a significant boom in office demand driven by firms specializing in artificial intelligence<\/a>, with the two U.S. markets accounting for more than 58 percent of all hiring taking place among AI companies, according to a September report from software company VTS. A prime example in New York City was Open AI\u2019s lease in October<\/a> 2024 for 90,000 square feet at SoHo\u2019s Puck Building, where the generative AI pioneer will eventually host roughly 850 employees once the space is built out.<\/p>\n \u201cWe are no longer just Wall Street,\u201d said Justin Kreamer, senior vice president of partnerships at the New York City Economic Development Corporation<\/a> (NYCEDC). \u201cWe are now the second-largest tech hub in the world, with 25,000 startups.\u201d<\/p>\n And, as of April 2024, New York City had the biggest share of relocating tech workers, according to data<\/a> from venture capital firm SignalFire, with tech jobs currently representing roughly 6 percent of the city\u2019s overall workforce.<\/p>\n Ergo, foreign investors feel confident that housing demand in New York City \u2014 driven largely by\u00a0 college kids and tech workers \u2014 won\u2019t ebb anytime soon.<\/p>\n \u201cYou\u2019re seeing these interesting cohorts that continue to really want to live here and be here, because we do have the best amenities in the world and the best restaurants and nightlife,\u201d Hinckley said.<\/p>\n New York City is also a place of great familiarity for international investors. If they\u2019re visiting the U.S. from Europe or the Middle East, foreign investors will likely land first in New York City due to its location and standing as the biggest gateway city in the country.<\/p>\n \u201cIf somebody\u2019s setting up an office for a Middle East group, they\u2019re setting up offices in New York City before anywhere else in the world,\u201d Hinckley said. \u201cThey still view the U.S. and New York as a very safe investment in multihousing, as a fundamentally sound product.\u201d<\/p>\n And that sentiment has endured in the face of some big concerns regarding the mayor-elect\u2019s policies on housing<\/a>. Zohran Mamdani has proposed a rent freeze on rent-stabilized apartments in New York City, which critics say could reduce owners\u2019 ability to maintain and renovate buildings. Residential landlords have also warned that a lengthy rent freeze on their rent-regulated units could tip their properties into bankruptcy<\/a>.<\/p>\n \u201cIf a Mamdani administration pursues stronger tenant protections, foreign capital won\u2019t disappear, but it will become more selective and demand higher risk-adjusted returns,\u201d said Victor Rodriguez, senior director of market analytics at CoStar<\/a>. \u201cWe may also see more foreign money come in as lenders rather than owners to manage policy risk.\u201d<\/p>\n While Mamdani navigates both pushback and support on his proposed policies, most foreign investors are taking a cautious but steady approach when it comes to multifamily investment in the city.<\/p>\n \u201cInternational investors are examining and awaiting the signals of the new local administration,\u201d Shkury said. \u201cThere\u2019s a little bit of a wait-and-see approach, but I think things will be a lot clearer at the end of the first quarter. The good news is there was a lot of uncertainty revolving around the elections. That uncertainty is gone. \u2026 So we\u2019re waiting for signals, positive or negative, to tell investors what to do moving forward.\u201d<\/p>\n Foreign investors also want to make sure that the incoming mayor chooses a reliable cabinet<\/a>.<\/p>\n \u201cForeign direct investment, more broadly, is a really important part of New York City\u2019s economy,\u201d Kreamer said. \u201cPart of investors\u2019 calculation is they want to have a good sense of confidence that the local jurisdiction that they\u2019re looking at has a good management plan in place, and that there\u2019s somebody within the local government that they can speak directly to and get information from.\u201d<\/p>\n To help facilitate this, the NYCEDC reaches out to both business investors and institutional investors to make sure they\u2019re aware of the upcoming policies and programs in the city.<\/p>\n While some investors take the wait-and-see approach, there\u2019s also a handful who have been bullish on multifamily sales in the city lately \u2014 specifically in Manhattan, where foreign investors see a \u201cflight to quality\u201d and strong \u201cfundamentals,\u201d according to Jeffrey Julien, a senior managing director of capital markets at JLL.<\/p>\n In late November, Hanshin Juken, a real estate firm based in Fukushima, Japan, bought the five-story apartment building<\/a> at SoHo\u2019s 212 Lafayette Street from Witnick Real Estate Partners for roughly $18 million. In September, Penn South Capital sold two next-door apartment buildings<\/a> at 18 and 20 East 13th Street in Greenwich Village to an undisclosed Japanese investor for a total of $24.9 million.<\/p>\n Then in October, Closer Properties acquired five Upper East Side residential properties<\/a> at the intersection of East 79th Street and Lexington Avenue for $62.5 million. Zhang Xin, founder and CEO of Closer Properties, built her fortune in China through her company Soho China.<\/p>\n Plus, in April, Israel-based real estate investment firm Realya acquired a five-building portfolio<\/a> of residential and retail properties in Greenwich Village \u2014 stretching from 387 to 401 Avenue of the Americas \u2014 for $24.3 million.<\/p>\n And, in September, Pamera North America \u2014 the North American branch of German property investment firm Pamera Real Estate Partners GmbH \u2014 purchased the mixed-use building<\/a> at 640 Broadway for $49.5 million. The nine-story building in NoHo includes 21 residential condos and retail space.<\/p>\n \u201cYou have to think about it from a macro perspective, why a foreign investor wants to be here,\u201d Shkury said. \u201cIt could be a currency strategy, wanting to own something in dollars. \u2026 It could also be a global diversification, and the fact that New York City is so stable and multifamily is so stable.<\/p>\n \u201cIf you look at Canadian investors who are here, especially Canadian pension funds, they want to diversify globally,\u201d Shkury added. \u201cAnd what\u2019s a better market than New York City? \u2026 I grew up in Israel. I can tell you that the returns we\u2019re getting in New York City, with all the headwinds, are still better than any return you can get in Israel for housing or investing in housing.\u201d<\/p>\n The types of investors putting checks down for apartments in New York City include family offices investing their institutional money directly into multifamily, as well as \u201csophisticated structures\u201d from overseas \u2014 generally meaning operators issuing bonds in the form of portfolio credit \u2014 according to Shkury.<\/p>\n Put more simply, it\u2019s a lot of international sponsors with established local platforms who have built teams on the ground and compete directly with domestic sponsors. Those investors understand the city\u2019s rent regulations, construction challenges, entitlements and capital markets. As Shkury said, \u201cThey\u2019re not occasional participants; they\u2019re embedded in the ecosystem.\u201d<\/p>\n And then it\u2019s a lot of global institutional capital \u2014 including major sovereign wealth funds, pension funds and global institutions \u2014 targeting marquee assets in general.<\/p>\n In terms of office, that was seen with Norway-based Norges Bank Investment Management\u2019s investment into 1177 Avenue of the Americas and Japan-based Mori Building Company\u2019s stake in SL Green Realty\u2019s One Vanderbilt. Their strategy, as Shkury said, is to align with top local sponsors and deploy long-term capital into irreplaceable locations. In other words, they\u2019re looking for stability and scale.<\/p>\n \u201cThere are different types of investors, and they\u2019re all very familiar with New York City,\u201d Shkury said. \u201cSo they\u2019re very familiar with each one of the different aspects of multifamily, and as such, they\u2019re willing to invest in decent iterations.<\/p>\n \u201cWith an office asset like One Vanderbilt, the economics are pretty clear,\u201d Shkury added. \u201cIt\u2019s a core asset doing extremely well, and something that\u2019s very explainable and very institutional. So for a foreign investor to jump in and invest alongside a major publicly traded operator, it\u2019s a perfect fit.\u201d<\/p>\n But going back to multifamily, specifically, foreign investors overwhelmingly focus on assets where \u201cregulatory risk is most predictable and operational know-how is less of a concern\u201d \u2014 in other words, newer, market-rate or mixed-income buildings, according to CoStar\u2019s Rodriguez. Especially since the 2019 tenant-friendly rent reforms that state lawmakers enacted, most investors today follow \u201cpatient capital, durable cash flow and disciplined asset selection,\u201d he said.<\/p>\n And, while the majority of foreign investment in New York City multifamily is landing in Manhattan, it seems as if some investors are branching out into the outer boroughs, starting with Brooklyn (where more and more 20-somethings continue to look for cheaper housing alternatives to Manhattan).<\/p>\n For example, in March, a Taiwan-based investment group bought 182 Eagle Street and 352 Monroe Street, new-construction multifamily buildings in Brooklyn\u2019s Bedford-Stuyvesant neighborhood. Alpha Realty Brooklyn, the broker on the sale, also recently closed a deal with an Israeli investor who was pursuing well-located, market-rate multifamily product.<\/p>\n \u201cHistorically, foreign capital in New York City has been laser-focused on prime Manhattan or maybe a few spots in Downtown Brooklyn and along the Williamsburg waterfront,\u201d Lev Mavashev, founder and principal of Alpha Realty, wrote for CO in March. \u201cThese deals signal something much bigger: New York City multifamily remains a global magnet \u2014 even outside of Manhattan, especially as pricing in Manhattan starts to firm up \u2014 and foreign groups are willing to explore the outer boroughs for value and yield. This is a major trend shift, and it\u2019s happening right now.\u201d<\/p>\n And, with rents climbing in both Manhattan and Brooklyn, interest rates sliding, and multifamily increasingly becoming the safest play for commercial real estate investors, the outer boroughs might see a lot more international capital soon.<\/p>\n \u201cMany [foreign investors] have folks that are domiciled here, and they get a little bit more comfortable in the outer boroughs than maybe some other groups, because they\u2019re chasing the additional yield that you can get on an investment out there versus Manhattan,\u201d JLL\u2019s Hinckley said.<\/p>\n It\u2019s not just New York\u2019s outer boroughs foreign buyers are looking at. There\u2019s been \u201cplenty of foreign capital\u201d in other U.S. cities as well, including Boston and Washington, D.C., as well as parts of southeast Texas and Florida, according to Julien from JLL.<\/p>\n In fact, foreign interest in multifamily investments appears to be growing in the U.S. overall. The asset class was the primary holding of 50 percent of international organizations, according to an April survey<\/a> from the Association of Foreign Investors in Real Estate, which polled representatives from 25 countries and 180 investment organizations globally.<\/p>\n Sixty-six percent of the survey respondents said the most important issue in U.S. real estate over the next five years is housing affordability and availability, with both multifamily and single-family rental investments set to skyrocket, according to the survey.<\/p>\n All in all, it doesn\u2019t look like any political headwinds from the Trump administration or the incoming mayor in New York City are deterring foreign investors from going after multifamily properties. After all, New York City is still \u201cone of the safest places on Earth to park money,\u201d according to Rodriguez.<\/p>\n \u201cNew York City is an incredible market,\u201d Ariel Property\u2019s Shkury added. \u201cIf you talk to investors, they\u2019ll all tell you the same thing. It\u2019s about the fundamentals and about the fact that people want to be here. Yes, there are some challenges in New York City, but it\u2019s the safest bet for investors worldwide, and that\u2019s evident.\u201d\u00a0<\/p>\n