Monday, July 26, 2010

Foreign Property Purchases Helping Manhattan Real Estate Market By Will Clarke

Singapore, Senegal, Laos and South Korea have a home in Manhattan but its not at the United Nations. Rather these countries are among a growing number of foreign nations purchasing residential / office space in Manhattan which is helping to fuel the market during the downturn.

Sellers can sometimes shy away from transactions involving foreign countries because they tend to take their time making purchase decisions and deals can be canceled following coups or changes in leadership. Furthermore they have special security considerations which can cause problems in negotiations. In better times, they would not be high on the list of desirable business partners but during the downturn, many sellers are willing to wait.
Often they purchase property to serve as offices and cultural centers. South Korea will begin construction on an eight-story cultural center along East 32nd which will include an art gallery and theatre along with traditional amenities.

While many impressive projects are planned by various countries, getting the initial deal to close can be a multi-year process. The Ivory Coast took three years to negotiate the purchase of an $8 million office condo along Second Avenue with the total time in escrow exceeding one year.

Recently a purchase with Senegal was briefly held up in court after the owner filed suit claiming that the country had been misleading the seller by promising payment but never following through. Two weeks later the lawsuit was withdrawn following payment but not after headaches and bad press for the country.

Difficulties like that can complicate seller's attitudes toward foreign purchasers but with Manhattan property at bargain rates, sellers are willing to risk possible complications.
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