- UBS in its “Future of New York” report published Wednesday outlined ideas for investing in the Big Apple.
- The Swiss investment bank focused on New York City as it recovers as the epicenter of the COVID outbreak.
- The commercial real estate market and the transportation sector are worth investment consideration.
The COVID-19 pandemic cast doubt about New York City’s standing as the center of finance, culture and the arts in the US, when it became the epicenter of the outbreak in 2020, said UBS in a report published Wednesday. But the Swiss investment bank offered some ideas for how to invest in the Big Apple as it climbs back from the health crisis.
Cases and hospitalizations in the city stemming from the Omicron variant of the coronavirus have been moving downward, according to local health officials. UBS in its “Future of New York” report said while Omicron hurt the city’s nascent recovery, as the pandemic subsides it sees a resumption of capital investments in physical infrastructure, among other types of investments.
Federal stimulus helped ease the strain on the city’s budget, and credit spreads on the city’s municipal bonds have compressed in the past year.
“However, investors can still find reasonable values in the city’s taxable and tax-exempt bonds, many of which are focused on sustainable investments.”
“We reject the idea that New York’s best days are behind it and instead make a concerted argument that its unique attributes still offer investors an opportunity to benefit from its recovery,” wrote Tom McLoughlin, head of fixed income Americas, and Solita Marcelli, chief investment officer Americas, at UBS Global Wealth Management.
Here are some investment sectors to consider, according to UBS:
Commercial Real Estate
Recovery in what’s been one of the most active CRE investment markets in the US has been sluggish compared with the “remarkable” rebound for residential housing. Many corporate employees are still working full-time or part-time from home to cut the risk of COVID exposure. UBS said the New York office market will be somewhat bifurcated for the foreseeable future, with newer projects and renovated buildings that offer improved ventilation, flexible workspaces, and touchless controls holding an advantage over older buildings without such features.
But the increasing number of vaccinations and willingness of federal and local governments to stave off mass shutdowns should help improve conditions in the CRE market. UBS said these factors are beginning to show up in office transaction volumes, particularly in the last three quarters of 2021.
It said in equities, real estate investment trusts, or REITs, with a degree of concentration in the New York metropolitan area are a way for …….