Questions Your Broker Can't Answer 

Jun 25, 2007

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Questions Your Broker Can't Answer


WHAT kind of people live in this building?”

That is often the first question brokers are asked by apartment hunters — be they couples with children, retirees seeking peace and quiet or 20-somethings prone to the occasional raucous party.

But in recent months, thousands of brokers have learned that in answering that question, they might just be breaking the law. Many real estate ads, for instance, use “family friendly” to describe large apartments. But according to a strict interpretation of federal, state and local fair-housing laws, that is illegal.

“If a family with children wants to know if there are other children the same age in a building, we’re supposed to say, ‘You should stand outside the building between 2 and 5 p.m. and see who walks in,’ ” said Michele Kleier, the president of Gumley Haft Kleier. “But how do you say something like that with a straight face?”

A glance at real estate listings online reveals that there are still companies whose ads say things like “Best family building in New York,” but there are many more that in the interest of fairness or out of fear of a lawsuit have cleansed their ads and are retraining their brokers.

Fighting discrimination in real estate is hardly new in New York City, but it has become a hot topic lately. The renewed focus was sparked mainly by a complaint filed last fall that brokers in the Brooklyn Heights office of the Corcoran Group had engaged in racial steering. Corcoran denies the charges, which are pending before the federal Department of Housing and Urban Development.

In addition, a proposed city law that would require co-op boards to provide, in writing, their reasons for rejecting a potential buyer, also has board members and brokers reviewing precisely what constitutes discrimination.

Real estate lawyers say there are lots of other descriptions and terms that could trigger discrimination lawsuits, prompting many brokers to watch what they say in front of clients and to scour their ads for risky words. Unacceptable terms include “adult community,” “bachelor pad,” “near churches” and “no children.”

Lawyers also warn against listing specific school districts and using catchphrases like “great for families,” “nanny’s room,” “quality neighborhood” and “senior housing.”

The strict interpretation of fair-housing laws prohibits brokers from providing information about people that could be construed as discriminatory in any of 14 protected categories. The categories include familiar ones like race, religion, sex and disabilities and less well-known ones like familial status, marital status, citizenship and occupation.

So a broker who says something like, “There are tons of little kids in this building — it’s really family friendly” could be accused of specifically steering families to the building and driving people without children away from it.

The Real Estate Board of New York holds several training seminars on fair-housing laws every year. This year, Neil Garfinkel, residential counsel for the board and the person who runs the seminars, has also held special training sessions for several companies. He estimated that he has already trained about 2,000 brokers since January.

Larger companies, including Corcoran and Halstead Property, have their own lawyers and run their own training sessions.

The State Legislature last week passed legislation that will require all brokers seeking to renew their licenses to undergo at least three hours of fair-housing training as part of their 22 ½ hours of continuing education. (Similar training is already required for initial licensing.)

The real estate board joined with the New York State Association of Realtors in March to sponsor the amendment. After Mr. Garfinkel’s recent seminar at Gumley Haft Kleier, Ms. Kleier said she had her staff comb through the agency’s advertisements and remove wording that suggested a building might be “great for families.”

“In my mind, it’s so restrictive it takes away part of the job that the public has relied on brokers to do,” Ms. Kleier said. “To be able to tell them: Is this building a place where I’m going to be comfortable? Or if my kids run through the lobby, am I going to be looked at cross-eyed?”

Brokers are often hired for their expertise in a specific neighborhood or building, and not being able to share certain information will make a broker’s job that much harder, she said.

Mr. Garfinkel said that Ms. Kleier is certainly not alone in her apprehension. "A lot of brokers are concerned about the push-back from customers who feel that, ‘You’re my broker — why aren’t you helping me and answering my questions?’ ” he said.

His advice to brokers is to state clearly at the first meeting with any client that as brokers, they must adhere to all fair-housing laws. “Then when a question is asked, you can say, ‘Remember we talked about fair-housing laws? This is what’s against the law for me to talk about,’ ” he said.

City laws cover more areas than state and federal laws, delineating 13 protected categories, compared with 11 delineated by the state and by the federal government. Many categories are covered by all three.

Most brokers are well aware of what’s against the law when it comes to race, religion and sex, Mr. Garfinkel said, but the laws on family status and occupation often draw gasps of surprise from brokers at his seminars. “But that’s exactly why we’re doing what we’re doing,” he said.

Mr. Garfinkel goes on to warn brokers that they should not identify the school districts where apartments are located. This, despite the fact that real estate ads often boast that an address is zoned for top-rated schools like P.S. 6 on the Upper East Side or P.S. 234 in TriBeCa.

He said that while it is all right to name a school district when specifically asked, the fact should not be advertised because some school districts have distinctive racial compositions and advertising the district could be seen as a way of expressing preference for a specific race. Brokers are often stunned by this prohibition, he said, “but I’m a lawyer, and I’m going by the strict letter of the law.”

Steven James, the president of all Manhattan offices of Prudential Douglas Elliman, said he had brought Mr. Garfinkel in to speak to his brokers because “people sometimes say stupid things without thinking, and this brings everybody back to reality.”

The brokers were in for some surprises. Mr. Garfinkel explained that to follow the city law regarding occupations, they should not ask people what they do for a living. “I think that blew everybody’s mind,” Mr. James said. “I don’t think we’ve recovered from that yet.”

The question is natural in the course of any getting-to-know-you conversation, Mr. James said, “but the point is what’s normal and everyday may not be legal.”

Mr. Garfinkel said that the occupation protection is often referred to as “the attorney law,” because it is meant to stop buildings from discriminating against lawyers — some buildings fear that they will be litigious and consequently bad neighbors.

“Conceptually, it makes sense to me because why is it relevant what a person’s title is as long as they can afford the apartment?” Mr. Garfinkel said.

Hall Willkie, the president of Brown Harris Stevens, said his firm had to turn down at least three exclusive sales in recent years because the owners insisted they did not want to sell to lawyers. “We’ve had to tell them that as licensed brokers, we’re sorry but we can’t do that,” he said.

“Some people think the laws go too far,” Mr. Willkie said. “But they need to go far, because these problems do exist.” Stepped up training, he added, “helps to sensitize us to try do what is right, and it prevents brokers from even inadvertently collaborating with owners to do something that the city has decided is not legal.”

The proposed law requiring co-op boards to give written explanations for their rejections gave impetus to the real estate board and the Council of New York Cooperatives and Condominiums to redouble their efforts at fair-housing training. The council and other co-op and condo organizations oppose the proposal and sent out an “action alert” last April urging their constituents to lobby City Council members and tell them that existing fair-housing laws make the bill unnecessary.

The real estate board and the co-op and condo council together have developed a two-page sheet on antidiscrimination requirements that they recommend be included in every application that goes before a co-op board. They also have put together a sheet on “buyer’s rights” that they recommend be given to every co-op applicant.

“It’s all part of an education process for board members and buyers, so that all sides understand what kinds of protections already exist and so they know what kinds of questions can and can’t be asked,” said Eva Talel, a real estate lawyer who advises the real estate board’s Residential Management Council.

The antidiscrimination sheet falls far short of the disclosure that would be necessary if the City Council passes the law on co-op rejections. Nearly two-thirds of the members of the City Council have signed on as co-sponsors, but the council speaker, Christine C. Quinn, has said she opposes the bill since existing housing discrimination laws already offer redress.

The proposed law would require co-op boards to provide a written explanation for any board rejection and to reveal the source of any negative information it received about a prospective buyer. Boards could be fined if they did not provide this information within five days of their decision.

Arthur I. Weinstein, a real estate lawyer and a vice president of the co-op and condo council, said that in an annual workshop on admissions procedures he presents to co-op board members, he urges them to review their application processes and to remove any questions that pertain to the 14 protected categories. “There’s always someone who says: ‘Oh my God, we ask those things all the time,’ ” he said. “It doesn’t matter how innocuous the question is. The trap is once you’ve asked it, you set yourself up for the charge that a rejection is based on that information.”

Invariably, much of the information may come out anyway, either volunteered by applicants or revealed in tax filings or other financial documents, but the board protects itself by not directly asking the questions.

State courts have long ruled, Mr. Weinstein said, that co-op boards have a right to choose their neighbors as long as they do not violate fair-housing laws. “But what the proposed law would do is prevent co-op boards from making character determinations,” he said. “It would pressure boards into accepting a potentially troublesome neighbor who has a reputation for excessive litigation or someone who has a woofer system that blares at x-amount decibels — even though those kinds of people are not a protected class.”

Lawyers and brokers agree that the current emphasis on antidiscrimination is not necessarily a bad thing.

“Blatant discrimination, people don’t do,” said Diane Ramirez, the president of Halstead Property. “But there are gray areas where brokers might think they’re helping a seller, but what they’re doing or saying could be misinterpreted.” That’s why, she said, Halstead requires all its brokers, even the veterans, to attend annual fair-housing seminars. “We want to be sure our agents understand the grayness that exists, and the only way to do that is make sure they keep hearing it,” she said.

Pamela Liebman, the president of the Corcoran Group, said her company began a fair-housing education campaign for its brokers more than a year ago, long before the National Fair Housing Alliance, a consortium of groups that works against housing discrimination, accused Corcoran of racial steering last October. In its report, the alliance accused Corcoran brokers of “blatant housing discrimination against African-Americans, as well as steering of whites away from neighborhoods of color.”

In addition to seminars for brokers, Corcoran’s efforts include a computer program that automatically screens property listings for unacceptable language. “Some words get completely blocked, and others flash a warning on your screen,” Ms. Liebman said. “It’s a huge list of words, but we have zero tolerance for violations.”

Ms. Liebman said that only one of the four agents accused in the complaint still works for Corcoran. “I believe that in each instance our agents acted in the proper way,” she said. “And when all the facts are gone through, I hope we will be vindicated.”

City Streamlines Searches For Real Estate Sales Data 

Jun 02, 2007

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Once, curious neighbors wanting to find out how much a co-op unit sold for had no choice but to ask. The city made things a bit easier last summer by putting such data online, but few besides wonks and real estate professionals could find it.

Now, those nosy neighbors have a new resource. A page on the Web site of the city’s Department of Finance — under the “Recent Sales Information” category at www.nyc.gov/html/dof/html/property/property.shtml — that went online yesterday allows anyone with basic computer skills to browse property sale prices by neighborhood and address. The sales data goes back four years.

“It is quite powerful, because they are breaking it up by borough, and they are breaking it up by year,” said Jonathan J. Miller, president and chief executive of Miller Samuel Real Estate Appraisers.

There are still limitations. Certain information about co-op units is not tracked by the city. While the new site lists the price paid by a buyer, it does not reveal the square footage of a unit, or the number of rooms. (Technically, co-ops are not considered real property because residents buy shares, not a deed, as they might for a condominium or house.)

Sale prices for most property transactions have been available online since 2004 on the Department of Finance Web site, but finding the information was tricky. First a user had to translate a street address into lots-and-blocks real estate terminology, and then enter that data into an index that was less user-friendly than the updated presentation.

“You really need to know what you are doing,” Gregory J. Heym, senior vice president and chief economist for Brown Harris Stevens and Halstead Property, said of the old system. “Public records are very hard to use.”

Some real estate agents cautioned that the database could lead to misguided expectations. Without more information about the particulars of each sale, like the size, condition and layout of individual units, potential sellers are likely to become fixated on the price they should be asking, the agents said, and overlook each property’s nuances.

“None of the reasons why people fall in love with apartments are part of this Web site,” said Michele Kleier, president of the real estate firm of Gumley Haft Kleier. Ms. Kleier said that property owners might think, wrongly, that their unit would be worth the same as a similarly numbered unit a floor or two above. “One apartment could need a $2 million renovation, and one could have had a $2 million renovation.”

Last August, a state law went into effect allowing the city to make co-op sale prices available to the public. The city’s finance commissioner, Martha E. Stark, said yesterday that the department hoped to include more information about co-ops in its database eventually. In the meantime, it sells digital indexes of deeds, mortgages and property tax liens to corporate subscribers, some of whom pay more than $170,000 a year.

But individuals have turned elsewhere for the same information. Propertyshark.com, a real estate research tool, has 200,000 users in New York City, according to Ryan Slack, the chief executive. He said he was confident that customers would keep using his site, because it collates sale histories, foreclosures, maps, photographs and, in many cases, the names and telephone numbers of the parties involved in each transaction.

“It’s not very helpful to just get a piece of information in isolation,” he said. “What’s helpful is to get the whole picture.”

Foreigners Learn the Language 

Jun 01, 2007

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Broker John Mehigan Gives his Spin on the Next Wave of Foreign Buyers


Few things underscore the quirks and excesses of New York real estate more than seeing them through the eyes of someone from a foreign country.

Take the number of bathrooms in New York apartments. Europeans think Americans are obsessed with them. Or closing costs — foreign buyers are appalled by what it costs to close a deal. They’re also baffled by things like title insurance, and they’re forcing brokers to come up with tortured explanations.

It’s a recurring challenge, because the backgrounds of foreign buyers are constantly changing as New York real estate comes into greater favor.

Big buyers today include Russians, Koreans and, of course, apartment seekers from Western Europe. Brokers say the next wave of purchasers could come from China and Eastern Europe as both areas see more wealth.

Some buyers, meanwhile, have dropped further off the radar, including pied- -terre seekers from the Middle East, who are heading to Asia — and Singapore in particular — in greater numbers, brokers report.

Overall, foreigners make up a large portion of new condo development buyers in Manhattan — around 30 percent by some estimates. Demand is strong enough that some foreigners set on purchasing large blocks of units in these projects have been rebuffed by developers, for fear of one group of nationals dominating a building.

International buyers are also heading farther afield than ever before, leaving the safe confines of neighborhoods like the Upper East and Upper West sides, and looking at projects like Donald Trump’s hotel-condo in Soho.

The Real Deal spoke to brokers about changing tastes among investors from abroad and about the things that never go out of style.

Patricia Warburg Cliff
senior vice president and director of European sales, the Corcoran Group

What is the most interesting trend you see among foreign buyers?

The most interesting trend that I find, and I guess not surprisingly, is that investment buyers from the Middle East have fallen off. I think that the fact that it is so difficult to get a visa for the U.S. has soured this group of people from purchasing here. They are, however, purchasing in Singapore.

What is the most negative trend you see among foreign buyers?

The most negative trend is that some developers are reluctant to sell large blocks — more than five to one person or entity — of their apartments to a specific foreign investor. I think they feel that too many will become rentals and that all of those rentals will be dumped on the market at the same time. Also, so long as the New York market is hot, they are not keen on having their building known as a “Korean, Russian, — take your pick — ghetto.” They like diversification. They would also rather sell their units for full price instead of being pressured into giving a discount for a bulk sale.

Which group of foreign buyers has recently grown the most quickly?

The Italian demand for higher-end luxury properties is growing substantially at the moment. They are a pleasure to deal with. They have great taste and are quick deal makers. The Koreans have been buying since the prohibitive laws against investing abroad in Korea have changed, but they are still limited as to how much currency they can take out of the country. The Russians have been around for a while but are still strong. South Africa seems to be producing a fair number of purchasers. Asians are less interested in buying for investment here. Again, Singapore is very popular, because the market is soaring there and many feel that it has maybe topped off here. Asian parents, however, are very hot on buying apartments for their college-age children who are in school here or who are starting careers here. Sometimes, they buy two- or three-bedroom units so they can have their own bedroom and bath when they visit.

Looking forward, who do you see as the next big wave of buyers?

Maybe Eastern Europeans as they become more prosperous. It’s always a status symbol for the nouveau riche foreigner to own an apartment in New York.

Where are the hot areas and neighborhoods for foreigners to buy right now in the city? How has that changed?

Initially, foreigners were only buying on the Upper East and Upper West Side. They felt comfortable because they know the neighborhoods. Time Warner was a big success with foreigners, but not 15 Central Park West, which is more Americans, specifically New Yorkers. Now foreigners are also buying in fringe, emerging neighborhoods.

Is there any change as far as foreigners buying in co-op buildings?

Only major international “captain of industry”-type foreigners buy in co-ops, and then only because they want the address on Fifth or Park, and they can’t get that in a condo — all of the great buildings there are co-ops.

Are there specific features of an apartment that foreigners look for that tie into their cultural background?

Generally foreigners, or at least European buyers, are somewhat overwhelmed by the amount of plumbing — bathrooms and powder rooms — in New York apartments. They find it really excessive to have a four-bedroom, 3,000-square-foot apartment with four and a half or five and a half baths, and often ask if some of the baths can be left out. Americans, they say, seem to be obsessed by bathrooms.

Any particular ways foreigners are using their apartments that have changed?

Yes, I think that people are less inclined to have a real pied- -terre here. The distances are too great to get frequent use. Many former pied- -terre purchasers today want to rent out their unit as an investment but still want to use it themselves. The best solution is to buy a hotel unit and put it into the hotel pool for specific times, leaving the other times open for personal use. Trump did this with great success at Trump International. The Mark is planning on doing this. The Carlyle Hotel has also permitted this.

Do foreigners have any complaints about the New York City real estate market, and has that changed over time?

Foreigners are surprised and somewhat appalled by the closing costs, which are very different from abroad. These have increased over time, what with developers passing on the city and state transfer taxes to the buyers, who will have to foot the bill again when they go to sell. They also have no idea what title insurance is. It’s somewhat difficult to explain, since they don’t have this in the countries that they come from. I try to give the example of the American Indians who originally owned Manhattan Island perhaps coming back with a land claim, which is then defended forever by the title insurance company. It’s a little far-fetched, but they get the point. The other complaint is that sometimes the quality of the finished construction is not what they anticipated. They are used to a finer finish and expected better. This is mainly the case with the less-expensive units.

What problems are foreigners running into in buying in the U.S.?

In the [post-] Sept. 11 environment, some foreigners from less-favored countries, such as the Philippines or the Middle East, are having trouble transferring currency into the country. There are all kinds of requirements placed on the banks to identify where the money is coming from and what purpose it’s being used for.

Asher Alcobi
principal broker and founder, Peter Ashe Real Estate

What is the most positive trend you see among foreign buyers?

The positive trend is that they are very focused. If they are not based in New York, they usually come for a limited amount of time and explore. But they are quick to understand that the market moves very quickly. When they understand that, they are very quick to make a decision.

Which group of foreign buyers has tapered off?

The Japanese are nonexistent; I don’t see much Japanese traffic here. In the ’80s when the Japanese bought, it was cheap. I think the Europeans and Israelis are the big players in the market now. Europeans are driven by the high euro-to-dollar ratio. For them it’s a 30 percent bargain. I even see people that are white-collar or lower white-collar, like UN employees, buying one small apartment in a condo.

Which particular new condo projects are drawing a lot of foreigners?

The Trump [hotel-condo project in Soho] is drawing a lot of attention, and 20 Pine Street. All of the Related Companies’ projects are a big attraction to foreigners. If they are not the best, they are one of the best in town. When they do something, they do it right, and many foreigners are in their buildings.

Is there any change as far as foreigners buying in co-op buildings?

I have no demand for co-ops with foreigners.

What are foreigners typically looking for in terms of the apartments they are buying?

A big issue for foreigners is the exit strategy. They want to know how liquid the property is that they are going to invest in. If they are not going to use it anymore, they want to know how quickly they can rent it or sell. They are worried about taxation — how much they will have to pay when they sell.

How has this changed over time?

I see more Europeans looking for modern properties, whereas 10 years ago they were looking for a more traditional way of living, prewar-type properties. Back home, they can have that type of property. Alternately, they like to see the industrial motifs of the very old industrial lofts in Tribeca and the West Village — the column supports, unfinished walls and ceilings are so completely different than what they are used to in their homelands.

Any particular ways foreigners are using their apartments that have changed?

If Europeans are using the property, they don’t like anyone using it if they aren’t there. They rarely buy something new in a new building just to rent it out.

Cheryl Tanenbaum
owner-broker, CMT Private Real Estate

Looking forward, who do you see as the next big wave of buyers?

The next trend will probably be the Chinese market, which will hit New York the way I see it hitting in other parts of the world. They will want to experience other places as they move from middle class to upper middle class.

Where are the hot areas and neighborhoods for foreigners?

The Upper East Side still has its strong appeal. The first desire of the European and Russian buyer is Fifth, Madison and Park avenues. They all want to be there. Others are thinking, “Where do I have to go to get the most for my money?” They are looking in the 20s and 30s where there are large loft spaces. The business community is going into the 50s, which has a strong appeal, and there is always the type that wants to be Downtown if they work there or on Wall Street.

What are foreigners typically looking for in terms of price range, size and features of the apartments they are buying?

French buyers love townhouses. They love the prewar feel and don’t mind walking up. For others, it’s a big negative.

Are there specific features of an apartment that foreigners look for that tie into their cultural background?

French buyers love the charm, the moldings, that it reflects a Parisian style or feel. The South Americans want newer buildings. They want the windows with views, they want marble.

What problems are foreigners running into in buying in the U.S.?

The issue they have with selling is the foreign withholding tax, because they don’t get all their money. It can be 10 percent, even though they are paying all their taxes — that makes people feel uneasy, as if they are not to be trusted. Unrelated to the Sept. 11 issue is whether it is best to go to a U.S. bank for financing or to bring the money from an overseas bank. If there is a large amount of money coming from overseas there is an investigation as to the source of the funds. They have to prove where it came from, so it is an extra level of investigation which can cause delays.

John Mehigan
broker, Gumley Haft Kleier

What is the most interesting trend you see among foreign buyers?

Being a native Dubliner, most of my international clients come from Ireland, with the rest coming from the U.K. What is most interesting is the Irish investor’s willingness to buy off the plans, sight unseen. I work closely with the Sorrento Group, based in Dublin, who bought 48 units in the Centria condo at 18 West 48th Street on behalf of Irish investors. They have another two projects being sold exclusively to Irish investors.

Which group of foreign buyers has recently grown the most quickly?

The Irish have certainly been the hungriest to get into Manhattan real estate over the last three years. There is movement from some of the old Soviet bloc countries, some Chinese, also Hong Kong. It’s always cyclical. At one point, as we all remember, it was the Japanese.

What features are foreigners looking for in the apartments they are buying?

High-rise residential units, such as we have in Manhattan, don’t exist in Europe. Views are a major selling point. Some of my clients initially come to the market with the notion of flipping the contract for a quick return. This is nigh on impossible on new construction, and they need to be told this up front.

Do foreigners have any complaints about the New York City real estate market, and has that changed over time?

They complain constantly about closing costs and the high commissions. In Ireland, the average fee is 1 percent, and they don’t co-broker. Some clients don’t believe me at first. There is also the issue of maintenance costs. This also comes as a surprise to many.

Kent Pahlajani
sales associate, DJK Residential

What is the most interesting trend you see among foreign buyers?

Most buyers that I see are from India and Dubai. They have the money to invest as the rupee is getting very strong, so it is at least 10 percent cheaper than it was, and that’s a big advantage. The real estate market in India has gone up a lot, which means that they themselves have more money to invest.

Where are the hot areas and neighborhoods for foreigners to buy right now in the city?

It used to be [that] Edison, New Jersey, and Jackson Heights, Queens, were the areas with the highest concentrations of Indians, but in the last five years it has changed, and they are looking into Manhattan.

Are foreigners buying in new condo projects in big numbers?

The buyers that I deal with like to buy in a condo at the initial offering. Then every time the developer sells a few, they raise the price, so by the time construction is finished these buyers have significantly grown their initial investment.

Which particular new condo projects are drawing a lot of foreigners?

For the Trump Soho project I have 10 to 12 people — they [are not] all Indian — that have signed letters of intent to buy.

Any particular ways foreigners are using their apartments that have changed?

Indian parents always worry about their children, so if they can afford to buy a place for children that are studying here, they prefer that over renting. Parents normally pay for the kids. They don’t ask the kids to pay for anything.

Marcos Cohen
senior vice president, Prudential Douglas Elliman

What is the most positive trend you see among foreign buyers?

One reason they want an apartment in New York City is that it gives them a chance to have a second wind in life. It’s always a psychological buy, to get more excitement out of their life, and New York is the best place for that.

The most negative trend?

The co-op system. Foreign buyers can’t understand the co-op system, and since Sept. 11 even condos have become harder [to purchase from abroad], except with a good broker. A lot of co-ops are not as great an investment, because for most of them they cannot buy as an offshore corporation or a [limited liability corporation], and they cannot rent it out as an investment, so that becomes very hard. Worst of all, it’s hard for them to understand the concept of co-op ownership.

Which group of foreign buyers has grown most quickly recently?

The South Koreans and Europeans. Some European countries that we haven’t seen in a long time are investing heavily now, like the Irish. There are also the Australians. Chinese buyers have become steady, and Russians are very good in the high-end condos. We haven’t seen the Spanish in the past the way we are now. A lot of companies from Spain are investing in residential real estate.

Where are the hot areas and neighborhoods for foreigners to buy right now in the city? How has that changed over the last five or 10 years?

In the past they all wanted to be on the Upper East Side and Central Park South because of the boutiques and Bloomingdale’s, Bergdorf Goodman and the like. Now it is Central Park West, the West Side and the Financial District. Soho, Tribeca, Nolita and Downtown in general is bringing a lot of foreigners.

Wigder Frota
senior vice president, Prudential Douglas Elliman

What is the most negative trend you see among foreign buyers?

When you bring them to see new developments, they don’t see the finished product, and they get frustrated with that.

Looking forward, who do you see as the next big wave of buyers?

I think there may be an increase of Latin American buyers because conditions are very good with the way American banks are offering financing. Now that the big boom of American buyers has sort of stopped a little bit, the banks have been much easier with foreign buyers who can put down 30 percent and get financing, even without citizenship or resident status.

Are foreigners buying in new condo projects in big numbers?

Absolutely. Some new condo buildings have restrictions on the amount a single buyer can buy; they are often restricted to two apartments. Where there isn’t, they buy 10 to 15 apartments.

Which new condo projects are drawing a lot of foreigners?

The Orion on West 42nd Street is one, and 555 West 23rd Street is a project in an incredibly desirable area for investors. 121 East 23rd Street was a very good one, and 485 Fifth Avenue.

How does the current exchange rate factor in?

In Latin America, the value of the American dollar has gone down. I deal with a lot of investors in Brazil. Four years ago the exchange rate of the real was 1 to 4, now it’s 1 to 2. The American dollar has decreased in value by 50 percent in the last four years, so the Brazilian real has increased in value. It is so much easier for them to buy here.



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