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Why Fat-Cat Foreigners Are Buying Up Manhattan

Discover why these real estate gems are so appealing.

While cities like Miami and Washington, D.C. have only seen "price reduced" signs and builders like

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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.

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The original open structure of commercial units like these allows builders more leeway to tailor the interior to the current market demands of the neighborhood and demographic.

27 North Moore's completely reconstructed lobby, for example, features a mosaic tile design typical of the turn of the century, but it also boasts a modern gym and garage, which appeals to an increasingly family-centric (and car-owning) Tribeca neighborhood.

A penthouse sells for $12.4 million and a two-bedroom sells for about $4 million.

502 Park Avenue, Trump Park Avenue: Former Hotel

Originally erected in 1929, this legendary location at the top of Park Avenue's commercial district was home to the Viceroy Hotel and the fabled Delmonico Hotel until 2003, when Trump gave it an $80 million renovation and converted the property into luxury condominiums, rechristened

Trump Park Avenue.

In most historic hotels, the top floor served as a ball room, so expect stupendously high ceilings in the penthouses of these condos. Trump Park Avenue's $45 million penthouse boasts 16-foot ceilings in its living room, not to mention stunning park views form its terraces. "Today you can't find that scale of indoor and outdoor space in combination with each other," says Sloane.

The restored prewar Moorish-style molding throughout the building makes it "very exotic, very evocative of the 1920s grandeur," Sloane adds.

823 Park Avenue: Formerly Residential

Originally designed by townhouse architects Pickering & Walker in 1912, the 38 apartments of this fully restored Greek Revival building are being converted to the original 12-unit model and a custom-built triplex penthouse selling for $30 million, the highest priced penthouse on Park Avenue.

The formerly residential property has the layout of classic family apartments with living space and light exposure unheard of in today's comparatively cramped luxury condos. Each unit was constructed originally as a classic Park Avenue family apartment, with four bedrooms and a large kitchen. "It's a dream floor plan," says Sloane.

Contrary to the international buyer trend, the future residents of this property are mostly local couples in their 30's and 40's with children or teens. "The space is a perfect match for them," says Meir.

Three floor units, selling for an average of $12 million, remain. The renovation will be completed in the first quarter of next year, says Meir.

Historical Draw

New York City has been in the forefront of historic preservation, which is a critical part of the city's economy, says Michael Slattery, senior vice president of the

Real Estate Board of New York.


NYC Landmarks Preservation Commission reviews all renovation work of historic properties in New York City to ascertain they don't lose their unique nostalgia that's attracting buyers at a steady rate. "The aim is to protect the historic fabric," says Slattery.

The slightest renovation to a historic building's exterior has to be approved by the Preservation Commission and often drastically lengthens the construction process. "But when you see the building restored to the original details," says Meir, "you know it's worth the time."

A healthy stream of buyers shows it's also worth the price tag.

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