RedSixLima
Madmaxista
The New York Times
May 8, 2007
An Irish Taste for Real Estate in Manhattan
By PATRICK McGEEHAN
They live an ocean away, but that has not stopped the Irish from lining up to buy condominiums in Midtown Manhattan, often years before they are built.
In some cases, entire buildings or large blocks of apartments in unfinished high-rises are being sold to Irish investors hungry to own a piece of New York City.
Neil McCann, an entrepreneur in Belfast, joined the rush of would-be Manhattan landlords last year when he said he signed a contract to buy a one-bedroom apartment near Gramercy Park for $600,000.
“It’s an Irishman’s dream to be able to go to Manhattan and be able to buy property there,” said Mr. McCann, 36, who added that he hoped to buy more New York apartments.
With a weak dollar, Mr. McCann said, the New York apartments are relative bargains compared with real estate in Ireland and Britain.
After a long economic boom that earned their country the nickname the Celtic Tiger, the Irish are flush with cash and searching the globe for places to invest it.
The westward flow of money “seems to be another example of how, in the wake of the Celtic Tiger, the relationship between Ireland and the United States has flipped,” said Linda Dowling Almeida, who teaches Irish studies at New York University.
The buyers do not even have to travel to New York, because the sellers are coming to them. Armed with glossy brochures about amenity-laden towers, New York brokers like Anne Marie Moriarty, of the Corcoran Group, have been dropping in to Dublin and Belfast and taking deposits.
“Most of these people are buying one or two apartments at a time,” said Ms. Moriarty, who has specialized in selling to the Irish for about two and a half years.
“Many of them buy off plan, because they’re antiestéticarless,” she added, referring to the custom of putting money down on apartments long before they are completed.
Of course, people from all over the world have been contributing to the sustained demand for apartments in Manhattan. But developers and brokers said the Irish seem to be the voracious newcomers of the moment, though their purchases have drawn less attention than previous buying sprees by the Japanese and the Saudis, who made splashes by acquiring trophy properties like Rockefeller Center and the Plaza Hotel.
“Because of the weak dollar, we’re seeing a lot of European buyers and it just seems like there’s a disproportionate amount from Ireland,” said Jonathan J. Miller, president of Miller Samuel, a real estate consulting company.
Jules Demchick, who has developed several buildings in Manhattan, said the Irish are amowing a long parade of foreign buyers. “I’ve seen the Persians and the French and the Dutch and the Germans and the South Americans do this,” said Mr. Demchick, the president of J. D. Carlisle.
Still, he said he was surprised when Cathal McGinley, managing director of the Irish broker Kean Mahony Smith, offered to take a block of apartments in the Centria, a high-rise near Rockefeller Center, and sell them in Ireland.
After Mr. McGinley’s company quickly sold the first 25, he came back for more. Eventually, most of the units in the building were sold to Irish investors, most of whom planned to rent them.
“Bar none, the No. 1 investment strategy for an Irish person is through property,” Mr. McGinley said. “Your average Joe on the street has probably got two, three, four, five residential assets. It’s considered to be a safe play.”
To them, an apartment in the center of Manhattan, no matter if it measures only 800 square feet, is a “trophy asset,” Mr. McGinley said.
His company also sold more than 60 apartments in the Atelier, a new building on the west end of 42nd Street.
Jay Eisenstadt, whose company, Esplanade Capital in Manhattan, is developing a 43-story condominium on Eighth Avenue in the theater district, said he planned to sell all 122 units in the building to a company based in Dublin, the Sorrento Group, which would then resell them to investors. Selling them as a block is more cost-effective than lining up buyers one by one, Mr. Eisenstadt said.
“The amount of money floating around over here is just phenomenal,” said Bryan Turley, Sorrento’s chief executive. “At some stage it has to leave the island. If you amow where Irish money is going, a good deal of it is going into property.”
Mr. Turley said his company had bought a piece of land near the Empire State Building, where a construction company owned by two brothers from County Kerry will build a 110-unit apartment building. Sorrento will then buy the finished building and sell the apartments, probably mostly to Irish buyers, he said.
At the heart of this investment surge lies some simple math, brokers said. With the dollar at historically low levels against the euro and the British pound, apartments generally cost less in Manhattan than in Dublin or London. But they still rent for more in Manhattan.
“Even if they could afford to buy in Dublin,” Ms. Moriarty said, “they could not get rent anywhere near what they get here.”
Kevin Harmon, a broker with Savills Hamilton Osbourne King, a real estate company in Dublin, used the example of a luxurious one-bedroom apartment in Manhattan that would sell for $900,000, equivalent to about 665,000 euros.
“For 665,000 euros, you’d buy a very nice two- or three-bedroom apartment in a good development” in the Dublin area, Mr. Harmon said. But the rent on the apartment in Dublin would be about 2,000 euros, or $2,700 a month, while the place in New York would rent for about $4,000 a month, he said.
“Going to New York and looking at those prices in dollars, there was a time when they would be a shock,” Mr. Harmon said.
Now, with the Irish property market cooling after a long, steep run, he added, “People feel there is better opportunity for capital appreciation there.”
To experienced property buyers like Mr. McCann, investing in real estate almost anywhere sounds safer then buying stocks on the exchange in Dublin or London. Mr. McCann, who said he had never owned a share of company stock, said he largely agreed with Mr. McGinley’s view that trusting one’s retirement to the vagaries of the financial markets would be “utter madness.”
Many of their countrymen have shown less hesitation, sinking their self-directed retirement funds into apartments far from home, even in a country that they have never visited.
They have bought so much property in England, Spain and in countries in Eastern Europe that they have been dubbed Crispies — short for cash-rich Irish seeking properties in Europe.
Irish newspapers feed the obsession with weekly sections filled with articles about far-flung markets. A recent edition of The Irish Times carried one article about buying apartments in Sofia, Bulgaria.
By comparison, Manhattan, with a well-established set of rules for buying and selling apartments, appears to be an island of stability, Mr. McCann said.
“It’s not like you’re investing in old Communist countries where landowners have only recently received title to their property,” Mr. McCann said.
Still, not everybody in the real estate business in Manhattan sees it as a sure thing. William Fegan, a partner with a real estate development company, Tribeach Holdings in New York, said he antiestéticared that many Irish buyers were too focused on the potential rental income and not enough on all of the other costs of owning an apartment in New York.
“For the life of me I haven’t been able to figure it out,” Mr. Fegan said. “If I was to advise them, I’d probably tell them not to do it. Carrying an apartment in New York City is an expensive proposition.”
May 8, 2007
An Irish Taste for Real Estate in Manhattan
By PATRICK McGEEHAN
They live an ocean away, but that has not stopped the Irish from lining up to buy condominiums in Midtown Manhattan, often years before they are built.
In some cases, entire buildings or large blocks of apartments in unfinished high-rises are being sold to Irish investors hungry to own a piece of New York City.
Neil McCann, an entrepreneur in Belfast, joined the rush of would-be Manhattan landlords last year when he said he signed a contract to buy a one-bedroom apartment near Gramercy Park for $600,000.
“It’s an Irishman’s dream to be able to go to Manhattan and be able to buy property there,” said Mr. McCann, 36, who added that he hoped to buy more New York apartments.
With a weak dollar, Mr. McCann said, the New York apartments are relative bargains compared with real estate in Ireland and Britain.
After a long economic boom that earned their country the nickname the Celtic Tiger, the Irish are flush with cash and searching the globe for places to invest it.
The westward flow of money “seems to be another example of how, in the wake of the Celtic Tiger, the relationship between Ireland and the United States has flipped,” said Linda Dowling Almeida, who teaches Irish studies at New York University.
The buyers do not even have to travel to New York, because the sellers are coming to them. Armed with glossy brochures about amenity-laden towers, New York brokers like Anne Marie Moriarty, of the Corcoran Group, have been dropping in to Dublin and Belfast and taking deposits.
“Most of these people are buying one or two apartments at a time,” said Ms. Moriarty, who has specialized in selling to the Irish for about two and a half years.
“Many of them buy off plan, because they’re antiestéticarless,” she added, referring to the custom of putting money down on apartments long before they are completed.
Of course, people from all over the world have been contributing to the sustained demand for apartments in Manhattan. But developers and brokers said the Irish seem to be the voracious newcomers of the moment, though their purchases have drawn less attention than previous buying sprees by the Japanese and the Saudis, who made splashes by acquiring trophy properties like Rockefeller Center and the Plaza Hotel.
“Because of the weak dollar, we’re seeing a lot of European buyers and it just seems like there’s a disproportionate amount from Ireland,” said Jonathan J. Miller, president of Miller Samuel, a real estate consulting company.
Jules Demchick, who has developed several buildings in Manhattan, said the Irish are amowing a long parade of foreign buyers. “I’ve seen the Persians and the French and the Dutch and the Germans and the South Americans do this,” said Mr. Demchick, the president of J. D. Carlisle.
Still, he said he was surprised when Cathal McGinley, managing director of the Irish broker Kean Mahony Smith, offered to take a block of apartments in the Centria, a high-rise near Rockefeller Center, and sell them in Ireland.
After Mr. McGinley’s company quickly sold the first 25, he came back for more. Eventually, most of the units in the building were sold to Irish investors, most of whom planned to rent them.
“Bar none, the No. 1 investment strategy for an Irish person is through property,” Mr. McGinley said. “Your average Joe on the street has probably got two, three, four, five residential assets. It’s considered to be a safe play.”
To them, an apartment in the center of Manhattan, no matter if it measures only 800 square feet, is a “trophy asset,” Mr. McGinley said.
His company also sold more than 60 apartments in the Atelier, a new building on the west end of 42nd Street.
Jay Eisenstadt, whose company, Esplanade Capital in Manhattan, is developing a 43-story condominium on Eighth Avenue in the theater district, said he planned to sell all 122 units in the building to a company based in Dublin, the Sorrento Group, which would then resell them to investors. Selling them as a block is more cost-effective than lining up buyers one by one, Mr. Eisenstadt said.
“The amount of money floating around over here is just phenomenal,” said Bryan Turley, Sorrento’s chief executive. “At some stage it has to leave the island. If you amow where Irish money is going, a good deal of it is going into property.”
Mr. Turley said his company had bought a piece of land near the Empire State Building, where a construction company owned by two brothers from County Kerry will build a 110-unit apartment building. Sorrento will then buy the finished building and sell the apartments, probably mostly to Irish buyers, he said.
At the heart of this investment surge lies some simple math, brokers said. With the dollar at historically low levels against the euro and the British pound, apartments generally cost less in Manhattan than in Dublin or London. But they still rent for more in Manhattan.
“Even if they could afford to buy in Dublin,” Ms. Moriarty said, “they could not get rent anywhere near what they get here.”
Kevin Harmon, a broker with Savills Hamilton Osbourne King, a real estate company in Dublin, used the example of a luxurious one-bedroom apartment in Manhattan that would sell for $900,000, equivalent to about 665,000 euros.
“For 665,000 euros, you’d buy a very nice two- or three-bedroom apartment in a good development” in the Dublin area, Mr. Harmon said. But the rent on the apartment in Dublin would be about 2,000 euros, or $2,700 a month, while the place in New York would rent for about $4,000 a month, he said.
“Going to New York and looking at those prices in dollars, there was a time when they would be a shock,” Mr. Harmon said.
Now, with the Irish property market cooling after a long, steep run, he added, “People feel there is better opportunity for capital appreciation there.”
To experienced property buyers like Mr. McCann, investing in real estate almost anywhere sounds safer then buying stocks on the exchange in Dublin or London. Mr. McCann, who said he had never owned a share of company stock, said he largely agreed with Mr. McGinley’s view that trusting one’s retirement to the vagaries of the financial markets would be “utter madness.”
Many of their countrymen have shown less hesitation, sinking their self-directed retirement funds into apartments far from home, even in a country that they have never visited.
They have bought so much property in England, Spain and in countries in Eastern Europe that they have been dubbed Crispies — short for cash-rich Irish seeking properties in Europe.
Irish newspapers feed the obsession with weekly sections filled with articles about far-flung markets. A recent edition of The Irish Times carried one article about buying apartments in Sofia, Bulgaria.
By comparison, Manhattan, with a well-established set of rules for buying and selling apartments, appears to be an island of stability, Mr. McCann said.
“It’s not like you’re investing in old Communist countries where landowners have only recently received title to their property,” Mr. McCann said.
Still, not everybody in the real estate business in Manhattan sees it as a sure thing. William Fegan, a partner with a real estate development company, Tribeach Holdings in New York, said he antiestéticared that many Irish buyers were too focused on the potential rental income and not enough on all of the other costs of owning an apartment in New York.
“For the life of me I haven’t been able to figure it out,” Mr. Fegan said. “If I was to advise them, I’d probably tell them not to do it. Carrying an apartment in New York City is an expensive proposition.”
