Hugh F. Kelly is an economist, a professor at the NYU Schack Institute of Real Estate and author of "24-Hour Cities," a book geared toward real estate investors published in April.
The term "24-hour cities" dates to the 1990s, said Mr. Kelly, whose book examines the chain effect in which economic growth enhances property values in so-called 24-hour cities, stronger real estate markets lead to better services, and more businesses and talented individuals are drawn in.
"People have been aware that investors are investing in these 24-hour cities, but there hadn’t been research on them," he said.
"New York," he said, "is at the top. Other cities include Miami, San Francisco, Washington, Boston, Chicago—colleges have a lot to do with it—and a final outlier: Las Vegas."
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While his book focuses on the United States, he said, cities around the world, such as Tokyo, Paris, London and Hong Kong, "are more ‘24-hour’ than almost every other city in the U.S. except New York." One international city that’s 18 hours? London, which has a lot to do with when the bars and the Tube shut down.
"When nightlife is later, people are prone to work later," Mr. Kelly said. "Look at the black cars outside Goldman Sachs at midnight in New York. They work hard, but they play hard, too."
Mansion Global: Describe your dream property.
Hugh F. Kelly: I like the energy and diversity of a city, and something that’s closer to recreational amenities like parks and the seashore.
MG: What does luxury mean to you?
HK: Luxury to me is a life circumstance where you don’t have to worry about the day-to-day things and you don’t need to decide between location and space—you can have both.
That differs from place to place. Ten years ago, I did a trek in the Himalayas and flew into Delhi, and what I noticed there and in Agra, dense lowland cities, luxury meant space because it was so congested.
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MG: What area do you think is the next hub for luxury properties?
HK: For at least two generations, luxury has been waterfront—Hamptons, Malibu, etc. But climate change, I think, is altering that. There are risks to seaside locations. I don’t think that means people will avoid the sea, but placing a significant amount of your net worth in a property that’s exposed is a problem.
Vast overbuilding is an issue. We’re seeing it in places like Miami, where everyone’s trying to get a piece of the pie.
MG: What’s your best piece of real estate advice?
HK: Think long term. A lot of the most famous and wealthy European and American families have made their fortunes that way.
Secondly, don’t put all your eggs in one basket. If you have the capacity to buy properties in a lot of places, that’s fine, but in addition to real estate, you should have a mixed bag of assets. You can’t be fully dependent on real estate.
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MG: How will Brexit affect the real estate industry?
HK: Wealth gives people the ability to ride out short-term shock, so wealthy buyers will be able to ride it out. We’ll figure out Brexit, but what’s the next shoe to fall? That’s the question.
You can go deeper and look at what keyed up Brexit as an issue, and that is frustration.
But as the world has become more risky geopolitically and environmentally, people say they want to have a safe repository for their fortunes, and real estate is a great way to conserve capital. Even the best cities will have their ups and downs, but over time, those places are the most liquid markets, so if you ever need to sell your property, you can.
In a risky world, conservation of capital becomes important.
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