| New York property (Manhattan condos) as an | | | | from a city like Manhattan New York far outweights |
| investment would have a gross rental yield of 4 to 5 | | | | the rental yield cashflow from a midsize of small city. |
| percent. After paying for common charges and | | | | Commercial property yield in New York (Manhattan) is |
| taxes, the net rental yield reduces to about 3 to 4 | | | | driven by price point. The lower price point |
| percent. | | | | properties, less than $20 million, generally have an |
| Manhattan, New York property is not a yield but | | | | asking price at a 5 percent yield. |
| rather an appreciation game. An investor buying New | | | | The higher price point commercial properties, more |
| York property focuses on the long term appreciation | | | | than $30 million, would have a higher yield, perhaps 8 |
| potential. Demand for Manhattan property is global, | | | | percent or more. Reason is that at a higher price |
| coming from all over the world. Manhattan is a brand | | | | point, there are fewer players which decreases |
| and the vacancy rate is less than 2 percent, relative | | | | demand. Also, buyers at the higher price point are |
| to the US's 10 percent average. Inflation would mean | | | | often institutions that put a lot more pressure on |
| rents and property values will increase. | | | | sellers from a pricing perspective. |
| A yield strategy in the US would mean investing in a | | | | The value of commercial property is driven by yield. |
| midsize of small city. For example, Syracuse, New | | | | Similar to a stock's PE ratio. The more the landlord |
| York is a college town with a yield of 10 to 15 | | | | can obtain in rent, the higher the value because a set |
| percent. From personal experience, the appreciation | | | | multiple, in this case rental yield, would be applied. |