An Irish Taste For Real Estate In Manhattan

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					  An Irish Taste For Real Estate In Manhattan
                                       By PATRICK McGEEHAN

      They live an ocean away,                                        who has specialized in selling to
but that has not stopped the Irish                                    the Irish for about two and a half
from lining up to buy                                                 years.
condominiums in Midtown                                                     “Many of them buy off
Manhattan, often years before                                         plan, because they are fearless,”
they are built.                                                       she added, referring to the custom
      In some cases, entire                                           of putting money down on
buildings or large blocks of                                          apartments long before they are
apartments in unfinished high-                                        completed.
rises are being sold to Irish                                               Of course, people from all
investors hungry to own a piece                                       over the world have been
of New York City.                                                     contributing to the sustained
      Neil McCann, an                                                 demand for apartments in
entrepreneur in Belfast, joined                                       Manhattan. But developers and
the rush of would-be Manhattan                                        brokers said the Irish seem to be
landlords last year when he                                           the voracious newcomers of the
signed a contract to buy a one-                                       moment, though their purchases
bedroom apartment near                                                have drawn less attention than
Gramercy Park for $600,000.                                           previous buying sprees by the
      “It’s an Irishman’s dream                                       Japanese and the Saudis, who
to be able to go to Manhattan and                                     made splashes by acquiring
be able to buy property there,”                                       properties like Rockefeller Center
said Mr. McCann, 36, who added                                        and the Plaza Hotel.
that he hoped to buy more New                                               “Because of the weak
York apartments.                                                      dollar, we’re seeing a lot of
      With a weak dollar, Mr.                                         European buyers and it just seems
McCann said, the New York                                             like there’s a disproportionate
apartments are relative bargains compared with      amount from Ireland,” said Jonathan J. Miller,
real estate in Ireland and Britain.                 president of Miller Samuel, a real estate
      After a long economic boom that earned        consulting company.
their country the nickname the Celtic Tiger, the          Jules Demchick, who has developed several
Irish are flush with cash and searching the globe   buildings in Manhattan, said the Irish are
for places to invest it.                            following a long parade of foreign buyers. “I’ve
      The westward flow of money “seems to be       seen the Persians and the French and the Dutch
another example of how, in the wake of the          and the Germans and the South Americans do
Celtic Tiger, the relationship between Ireland      this,” said Mr. Demchick, the president of J.D.
and the United States has flipped,” said Linda      Carlisle.
Dowling Almeida, who teaches Irish studies at             Still, he said he was surprised when Cathal
New York University.                                McGinley, managing director of the Irish broker
      The buyers do not even have to travel to      Kean Mahoney Smith, offered to take a block of
New York, because the sellers are coming to         apartments at the Centria, a high-rise near
them. Armed with glossy brochures about             Rockefeller Center, and sell them in Ireland.
amenity-laden towers, New York brokers like               After McGinley’s company quickly sold
Ann Marie Moriarty, of the Corcoran Group,          the first 25, he came back for more. Eventually,
have been dropping into Dublin and Belfast and      most of the units in the building were sold to
taking deposits.                                    Irish investors, most of whom planned to rent
      “Most of these people are buying one or       them. “Bar none, the No. 1 investment strategy
two apartments at a time,” said Ms. Moriarty,       for an Irish person is through property,” Mr.
McGinley said. “Your average Joe on the street        would be about 2,000 euros, or $2,700 a month,
has probably got two, three, four, five residential   while the place in New York would rent for
assets. It’s considered to be a safe play.”           about $4,000 a month, he said.
       To them, an apartment in the center of               “Going to New York and looking at those
Manhattan, no matter if it measures only 800          prices in dollars, there was a time when they
square feet, is a “trophy asset,” Mr. McGinley        would be a shock,” Mr. Harmon said.
said.                                                       Now, with the Irish property market
       His company also sold more than 60             cooling after a long, steep run, he added, “People
apartments in the Atelier, a new building on the      feel there is better opportunity for capital
west end of 42nd Street.                              appreciation there.”
       Jay Eisenstadt, whose company, Esplanade             To experienced property buyers like Mr.
Capital in Manhattan, is developing a 43-story        McCann, investing in real estate almost
condominium on Eighth Avenue in the theater           anywhere sounds safer then buying stocks on the
district, said he planned to sell all 122 units in    exchange in Dublin or London. Mr. McCann,
the building to a company based in Dublin, the        who said he never owned a share of company
Sorrento Group, which would then resell them to       stock, said he largely agreed with Mr.
investors. Selling them as a block is more cost-      McGinley’s view that trusting one’s retirement
effective than lining up buyers one by one, Mr.       to the vagaries of the financial markets would be
Eisenstadt said.                                      “utter madness.”
       “The amount of money                                                  Many of their countrymen
floating around over here is just                                      have shown less hesitation,
phenomenal,” said Brian Turley,                                        sinking their self-directed
Sorrento’s chief executive. “At                                        retirement funds into apartments
some stage it has to leave the                                         far away from home, even in a
island. If you follow where Irish                                      country that they have never
money is going, a good deal of it                                      visited.
is going into property.”                                                     They have bought so much
       Mr. Turley said his                                             property in England, Spain and in
company bought a piece of land near the Empire        countries in Eastern Europe that they have been
State Building, where a construction company          dubbed Crispies – short for cash-rich Irish
owned by two brothers from County Kerry will          seeking properties in Europe.
build a 110-unit apartment building. Sorrento               Irish newspapers feed the obsession with
will then buy the finished building and sell the      weekly sections filled with articles about far-
apartments, probably mostly to Irish buyers, he       flung markets. A recent edition of The Irish
said.                                                 Times carried one article about buying
       At the heart of this investment surge lies     apartments in Sofia, Bulgaria.
some simple math, brokers said. With the dollar             By comparison, Manhattan, with a well-
at historically low levels against the euro and the   established set of rules for buying and selling
British pound, apartments generally cost less in      apartments, appears to be an island of stability,
Manhattan than in Dublin or London. But they          Mr. McCann said.
still rent for more in Manhattan.                           Still, not everybody in the real estate
       “Even if they could afford to buy in           business in Manhattan sees it as a sure thing.
Dublin,” Ms. Moriarty said, “they could not get       William Fegan, a partner with a real estate
rent anywhere near what they get here.”               development company, Tribeach Holdings in
       Kevin Harmon, a broker with Savills            New York, said he feared that many Irish buyers
Hamilton Osbourne King, a real estate company         were too focused on potential rental income and
in Dublin, used the example of a luxurious one-       not enough on all of the other costs of owning an
bedroom apartment in Manhattan that would sell        apartment in New York.
for $900,000, equivalent to about 665,000 euros.            “For the life of me I haven’t been able to
       “For 665,000 euros, you’d buy a very nice      figure it out,” Mr. Fegan said. “If I was to advise
two- or three-bedroom apartment in a good             them, I’d probably tell them not to do it.
development” in the Dublin area, Mr. Harmon           Carrying an apartment in New York City is an
said. But the rent on the apartment in Dublin         expensive proposition.”

				
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posted:6/29/2011
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