Wall Street and its environs have long been a global center – for finance. But as Downtown’s residential population continues to grow, observers say, it’s also become a magnet for investors and residents from around the world.
International economic conditions are driving investors from London to Shanghai to purchase residences in Manhattan, Jonathan Miller, president and CEO of Miller Samuel Inc, told the audience at Becoming FiDi, a panel discussion hosted by 75 Wall Street.
“Luxury real estate has almost become a sort of new global currency,” he said.
While foreign buyers typically represent between 15 and 20 percent of the demand for residential condos, Miller said, the percentage is currently somewhere between 30 and 40 percent.
“It’s sort of this great irony that a weak international economy and global instability is a good thing,” he said. “It’s benefiting us as a market.”
And, brokers say, that benefit is being felt disproportionately downtown, where a profusion of new development is rising from the ashes of 9/11 in sight of the Statue of Liberty, Brooklyn Bridge, and that bronze bull.
“I think it’s kind of a sexy area for foreigners,” Rory Bolger, a senior associate and CitiHabitats, told Real Estate Weekly. “To live on Wall Street, to live near the Stock Exchange, to live near the new World Trade Center.”
With prices per square foot relatively low, that sexiness also suggest an opportunity for profit.
“People overseas know very, very well what the financial district is,” Corcoran Group’s Richard Nassimi, director of sales at the W Downtown, told Real Estate Weekly. “They recognize the place as a very tangible piece of real estate that will never die.”
With 830 units under construction at the end of the second quarter this year (according to the Downtown Alliance,) the plentiful supply of new, amenity-rich property also contributes to drawing international buyers downtown.
And almost all of the new construction is condos, Bolger points out.
“Co-ops are almost out of the question for foreigners, unless they’ve spent a lot of time establishing credit in the U.S,” he said.
New developments also offer tax abatements that keep annual costs low.
In Nassimi’s experience, the “vast majority” of buyers downtown are coming from overseas, he said, and while more than half are investors, the pied-à-terre market is also strong. Amina O’Kane, director of Upper School Admissions at Léman Manhattan Preparatory School, was on hand at the Becoming FiDi event to testify to a growing population of international residents downtown.
Léman Manhattan is a private school in the Financial District that caters to international students.
International families and their brokers regularly contact the school about the neighborhood, she said.
“Given the growing international population here, more will bring more,” she said.
According to O’Kane, international residents tell newcomers, “this has become a very comfortable and familiar place to us. Not that everyone’s the same, but that there’s comfort in that diversity.”
In addition to international instability, tight domestic credit markets also contribute to the way international buyers are dominating the market — because they usually pay cash.
At the W, which Nassimi hopes to soon have more than half sold, some investors are buying multiple units for cash.
“We are right across from billions and billions of new development, and this is just the beginning ,” Nassimi said. “This place is going to come back better than it was before.”