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Best Cities for Commercial Real Estate Investing

Commercial real estate is a huge market that generates billions of dollars worldwide.  The global research team Cushman and Wakefield present an annual report that examines commercial real estate; in which they write where the most investing happened in the past year and where the investing is likely to occur in the following year.  According to the report, in 2013 the top ten biggest cities for commercial real estate investing were as follows: New York City, London, Los Angeles, Tokyo, San Francisco, Washington DC, Hong Kong, Paris, Houston and Chicago.  The report continues to rank 15 more cities worldwide.  Although unlisted, within the report the research team examines the top 100 cities to look at trends of commercial real estate investing.  These top 100 cities account for 86% of the property investment activity worldwide.

San FranciscoMost of the commercial real estate in confined to certain areas of the world.  Of the top 25 cities, 15 are in North America, 4 are in Europe and 6 are in Asia; there are no leading cities for 2013 in South America, Africa or Australia.  Not all of the top 25 cities received equal attention in every investing market.  Although all kinds of commercial investing occur in all cities, the following cities are leaders in certain investing markets:  New York leads in the multifamily and hospitality market, London in the office market, Los Angeles in the industrial market and Hong Kong in the retail market.

There are many factors that drive people to invest in commercial real estate.  When investing, the investor looks at the quality of human capital; being the education, health and living standards of the city in which they are investing.  The social structure in the city- a good social structure creates a higher quality, more satisfied work force.  The political structure of the country in which they are investing is also examined.  They examine the cost base and if it allows for an efficient, flexible office environment.  Lastly, they look at technology and the use and accessibility of technology within the city.

According to Cushman and Wakefield, 2014 should also be a good year for commercial real estate investing.  They predict that property demand will continue to increase in the big cities including New York and London.  They believe that Tokyo, Paris, Hong Kong and Shanghai will start to experience more commercial investing.  The predicted up and coming cities for next year will be: Amsterdam, Berlin, Vienna, Taipei, Auckland and Melbourne.

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