Real Estate

The Russians Are Coming

And the Brits, and the South Africans...Overseas buyers flood Manhattan.

By Deborah Schoeneman
Published May 21, 2005

The rest of the world may be griping about the United States, but foreign buyers, especially Russians, do seem to like one thing about us: Manhattan real estate. Overseas shoppers have been pouring into the luxury market in recent months, drawn by the weak dollar and the seemingly endless potential for appreciation. “There’s a renewed interest in having pied-à-terres,” says Patricia Cliff, the Corcoran Group’s director of European affairs. “Six months ago, there was none.” And for the jet set, a pied-à-terre doesn’t mean a studio near Grand Central Terminal; it means a huge condo or a townhouse. Co-ops, which tend to reject investment buyers, are usually out of the question.

What sorts of properties are overseas purchasers snapping up? “Russians like old-world,” says A. Laurance Kaiser IV of Key-Ventures, who recently sold four houses to Russians, including a 60-unit, $22 million building on the Upper East Side that the buyer plans to turn into a single-family home. Jed Garfield, whose father, Leslie J. Garfield, owns a firm specializing in townhouses, just sold the New York Observer’s townhouse headquarters at 64th Street and Park Avenue to a Russian investor for $12 million. “The Russians are shopping all over the place,” says Garfield, who estimates that foreigners now make up 15 percent of his clientele, up from zero six months ago.

When they don’t go for townhouses, they’ve been picking up the newest and glitziest properties of all: the condos in Time Warner Center. At first, 70 percent of the building’s buyers were domestic, says Susan de França of the Related Companies, the center’s developer. “In the winter of 2003, we saw that start to change, and now we probably have 40 percent of our building owned by international buyers,” she says. The father of Russian aluminum heiress Anna Anisimova recently bought her a $15 million condo there. He’s also spent $23 million to turn Diane Von Furstenberg’s double townhouse into condos and is funding another daughter’s house hunt.

The brokers, needless to say, are delighted. The luxury market normally goes quiet in the summer, and the European buying spree is offering relief. So are South Americans, Australians, and South Africans, fleeing their Southern Hemisphere winter. They also tend to move faster than neurotic New York shoppers. A few months ago, Douglas Elliman broker Shaun Osher heard from a British businessman who “was only here for one day,” says Osher. The broker swiftly sold him a $1.3 million condo downtown.

Broker Michael Shvo of Douglas Elliman attributes the quick deals to investing rather than nesting, adding that his overseas clients are “very unemotional buyers.” Shvo just showed a young Russian client an Upper East Side townhouse before it officially went on the market; he instantly made a $10 million offer. “New York, all of a sudden, looks very cheap,” he says, laughing.

Big Deals

Soho
150 Thompson Street
3-bed, 3½-bath, 6,000-square-foot co-op.
Ask: $6.9 million.
Sell: $6.5 million.
Maintenance: $2,250.
Time on market: 4 months.
ImClone founder Sam Waksal once owned this apartment, a huge penthouse with a party-ready rooftop terrace and ultraluxe details like Venetian-plaster walls and a double-height kitchen with two SubZeros. The most recent owners sold it with no trouble, after reducing the price from the original $7.9 million. “This building was built in 1863, and it’s one of the oldest co-ops in Soho,” explains Corcoran broker Patricia Dugan. “The maintenance, especially for such a phenomenal place, is unbelievably low.” The buyers snatched it up, enduring six months of closing paperwork—then put the property right back on the market, asking $7.85 million.

Murray Hill
415 East 37th Street
2-bed, 2-bath, 1,510-square-foot condo.
Ask: $1.1 million.
Sell: $1.075 million.
Charges and taxes: $2,874.
Time on market: 2 months.
This spacious apartment in the Horizon condos, on the eastern edge of Murray Hill just off the FDR Drive, has an impressive slate foyer and kitchen, as well as access to the building’s well-tended pool, gym, and rooftop terrace. But the space sold itself, according to Douglas Elliman broker Jacky Teplitzky: “The prior owners were in the real-estate business, and they did a renovation that was just astonishing.” That rehab included an unusual split kitchen with a hallway down the middle, plus adding on part of an adjacent apartment to create a funky new shape with lots of privacy. --SARA CADACE