Why Fat-Cat Foreigners Are Buying Up Manhattan

While cities like Miami and Washington, D.C. have only seen "price reduced" signs and builders like Toll Brothers (TOL Quote) and Hovnanian (HOV Quote) are biting their nails, New York City is drawing buyers, particularly the international set, to its condo sales like never before, says Kathy Sloane, residential real estate broker at Brown Harris Stevens and the exclusive broker for 823 Park Avenue.

Other firms, like Corcoran and Prudential Douglas Elliman, are also riding the wave of New York City's record luxury condo prices.

Attributed partially to the weakening dollar and the strengthening euro, pound and peso, sales are further bolstered by the multiplicity of property choices New York City has to offer foreigners. "Anything you want is being built, and much of what will be sold over the next few months doesn't even exist yet," Sloane adds.

And one of the most sought-after real estate options, historically renovated condos, have carved out a comfy niche in the city's foreign-buyer market.

Americans are not as secure in their jobs, and company bonuses, which drive the real estate market from Dec. 1 to March 15, are declining, says Sloane. "People in general are reticent about over investing in anything."

Yet Sloane's phones have been ringing loudly and frequently with prospective buyers from India, Ireland, Latin America and increasingly Canada, looking for historic condos. So why are foreigners so interested in getting a piece of U.S. history?

Most buyers seek out the grand high ceilings, breezy spaces and cozy fireplaces they can't find in modern condo developments. Co-ops typically offer these features, but many foreigners and a newer, increasingly international Wall St. generation want timeless charm combined with a quick exit strategy and no housing board to deal with. "For many foreigners, their only assets [in America] are real estate," says Sloane, "so they're interested in owning something that's going to be special," but without the lease commitment.

Nir Meir of the Property Markets Group and one of the developers for 823 Park Avenue, categorizes historically renovated condos as commodities, especially in landmark districts of New York City. Renovated condos make up a small percentage of the luxury condo market, he says, but if you're lucky enough to consider buying one, consider how its history can best serve your needs. Chances are you'll be looking at a former warehouse, a famous hotel or converted residences.

Here's what you can expect from each type of property:

140 Franklin and the Ice House at 27 North Moore: Formerly Commercial

140 Franklin, a Romanesque revival building, was converted in 2000 from a commercial unit to 14 loft condominiums, each valued around $15 million. Similarly, the Ice House at 27 North Moore was converted from a warehouse to condos about 10 years ago.