Halstead Property

Diane M. Ramirez
President
dramirez@halstead.com
(212) 381-3203

Dorothy Somekh
Exec. Vice President
Park Avenue Flagship
Tel: (212) 381-2265
dsomekh@halstead.com

European Buyers Make December A Busy Month For Manhattan Real Estate

By Christine Haughney

NEW YORK: The sidewalks of Manhattan are crammed this month with European tourists on shopping sprees, picking up gifts that cost far less in the United States than they do at home because of the weak dollar. But they are not just crowding into boutiques and department stores. Some of them are also shopping for condos.

"There's bargains to be had," said Kerry Miller, who with her husband, Marty, was working through her Christmas gift list by buying sweaters at Abercrombie & Fitch and makeup at MAC, as well as touring 29 apartments. The couple searched for a one-bedroom condo they liked for about $650,000, and were close to making an offer for one in the Chelsea section of the city.

While locals remain wary about real estate and worry about bonuses and the economic climate, tourists are keeping brokers busy with their eagerness to buy up Manhattan apartments.

"The exchange rate is like a gift from God for Europeans," said Danielle Grossenbacher, the Coldwell Banker Hunt Kennedy broker working with the Millers. "Everybody is feeling they have an opportunity to purchase a piece of Manhattan."

These buyers are transforming a traditionally slow month for real estate brokers in Manhattan in an era when real estate brokers across the country are struggling to sell homes. This year, brokers on the island are waking before dawn to talk with European buyers about amenities and closing costs and working late advising foreign buyers in town on the best places to shop for gadgets and clothes.

The number of foreign buyers has doubled in the last two years, according to data from Radar Logic.

"We'd have had difficulty absorbing the elevated level of new development coming on the market without foreign buyers," Miller said. "They are a key source of demand for new development."

Donna Olshan, a broker in Manhattan, said that in December she typically only receives calls from a few Wall Street bankers looking to spend their bonuses. This month, an unprecedented number of foreign buyers have called, e-mailed and shown up at her office shopping for real estate. "We're seeing," she said, "a flurry of foreign activity from Britain, France and Italy, looking to spend their pounds and euros."

These buyers are helping shield Manhattan from the housing slowdown that has plagued the rest of the United States and are providing a ready market for thousands of new condominiums. The buyers like condos for their amenities and flexible rules that allow renting the apartments as investments. The fact that many of them are in neighborhoods that are not traditionally residential, like midtown and the financial district, does not seem to deter them: They like the fact that these neighborhoods are well known.

Diane Ramirez, president of the real estate brokerage Halstead Property, estimates that foreign buyers will make up about 20 percent of the firm's sales transactions in 2007 in terms of dollars spent, compared with nearly 15 percent in 2005. She said that five years ago, foreign buyers had no apartments to buy because the market was made up mainly of coops whose owners would not welcome them into their buildings.

Foreign buyers are planning to continue their shopping sprees for condos and clothes through the new year, anticipating that the dollar will continue to weaken.

Jonathan Fletcher and Aine Marshall came to Manhattan from London to buy a $1 million investment property. Fletcher, who is considering buying in the financial district where he believes there is opportunity for appreciation, plans to put down his deposit money first and wait for the dollar to weaken more before paying for the entire apartment.

Even if he does not buy, the savings from shopping in the United States covered the cost of the trip. They spent $8,000 on clothes, a camera, and a $5,000 drum set that would have cost about double that back home.

Foreign buyers often purchase quickly because they largely view these apartments as investments like a bond or a stock. Dorothy Somekh, a Halstead broker, said that a Belgian couple she represented bought in an afternoon a $1.7 million two-bedroom condo to rent out for about $7,500 a month. After the couple signed the contract, they headed to Abercrombie & Fitch to shop for clothes for their daughters.

"They're not really sophisticated investors." Somekh said. "But they thought 'Where else can I put my money?' "

Anne Marie Moriarty, a Corcoran broker, recently coordinated her meetings with her Italian buyer, Roberto Lorenzon, around his family's shopping schedule.

She showed him some apartments after his trip to Gap Kids for his son and daughter. She met Lorenzon at Victoria's Secret while he waited for his wife to make some purchases. While Lorenzon had a deal fall through on a $1.3 million Murray Hill penthouse, he scheduled another trip in January to make a purchase.

"She was all about the stores and he was all about the condos," said Moriarty. "All of the hours were arranged around shopping."

Of course, a busy shopping season mean that Manhattan brokers are running out of time to buy their own family's gifts.

Moriarty, who worked every day for six straight weeks, has resigned herself to shopping this week with the last-minute holiday crowds. By the weekend, she said, she expected that her British, Irish and Italian buyers would "be home with their presents."

Wednesday, December 19, 2007