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In Any Language, Manhattan's Hot

The dollar is hyperventilating, mortgage rates are still attractively low and international buyers - drawn by outsized real estate gains as well as the city's burnished image of livability - are barreling straight for Manhattan.

But it's not exactly a takeover. Yet.

"I find it slightly exaggerated that everyone's jumping across the ocean with their wallets open," said Patricia Warburg Cliff, a senior vice president and director of European sales at the Corcoran Group. "Everybody thinks Manhattan is going to be taken over by them. It isn't really that everybody from Europe is on a direct flight to New York. But yes, there is a lot more of this than a year or two ago. In terms of actual buyers, maybe 10 to 15 percent more."

Remarkably little data exists to quantify the trend. According to HomeBridge Mortgage Bankers in New York, which specializes in mega-jumbo mortgages, about 25 percent more loans are going to international buyers so far this year, with pieds-à-terre gaining ground and straight investments holding steadier.

Whatever its exact dimensions, the wave of interest from overseas has cast a decidedly lopsided shadow over the map of Manhattan real estate. It is shaped as much by the practical constraints imposed on a noncitizen (condo not co-op, move-in not fixer-upper) as well as the preconceptions of buyers who may have experienced New York primarily from the berths of their Midtown hotel rooms, in the pages of celebrity publications or through "Sex and the City" syndications.

Foreigners' abridged views of New York play out most noticeably in their choice of neighborhood. Many consider the Upper East and Upper West Sides little more than becalmed back lots too divorced from the city's commerce and entertainment, with the areas' schools and playgrounds of little value to someone in residence only a couple of months a year.

Midtown, on the other hand, is hot.

"I really liked the 50's and 60's the best," said Helen Cannon-Brookes, an Australian empty-nester who, along with her husband, Michael, recently settled - pending approval of the condo board - on a 33rd-floor two-bedroom pied-à-terre at Trump World Tower at 845 United Nations Plaza, in the upper 40's. They found the apartment with the help of Holly S. Hunt, an agent at Halstead Property. The blocks in Midtown East "had more of a city feel about them," she said. "You could go around the corner for a cappuccino. Once you got into the 70's, I found that it's more one residential block after another."

Another fan of Midtown is Daniel Amouyal, 63, a French citizen working with his agent, Charlie Attias of Corcoran, to buy four to six apartments in the Orion, a condominium development under construction at 350 West 42nd Street. The 60-story luxury building in Hell's Kitchen - where apartments range from $435,000 to $490,000 for an alcove studio and start at $1.65 million for a three-bedroom - will share a block with the Port Authority Bus Terminal. Mr. Amouyal plans to combine two or more of the units into a three-bedroom pied-à-terre for himself, his wife, Martine, and three teenagers, and for possible use as off-campus housing if his children attend college here. The other apartments will be rented out as investments.

In a recent conversation from his home in Tahiti, Mr. Amouyal, a building contractor, said that along with the cheaper-than-uptown preconstruction price point, he viewed the building's proximity to the bus terminal and Times Square as an asset along with its central Manhattan location. He said he was confident that the building would appreciate at the same rate as other properties around the city.

But other overseas buyers are attuned to the nuances of status conveyed by a particular building or neighborhood. For this group, "the address speaks louder than the space," said Rowena Villaruel, an agent with Prudential Douglas Elliman Real Estate.

Denied entrance into the many co-op buildings lining Central Park West and Fifth Avenue, the status-conscious international buyer is likely to stalk the white-hot 59th Street corridor. With bookends on the west of the Time Warner Center and on the east of One Beacon Court, a perfume-counter sneeze from Bloomingdale's, the area includes Central Park South and teems with full-service condominiums, iconic views of the park and recognizable addresses.

"Central Park South is a city in itself," said Marcos G. Cohen, a senior vice president at Douglas Elliman. With last year's opening of the shops at Time Warner Center, "everything you need is there."

Mark Menendes, a 32-year-old investor from Madrid, is buying a part-time residence at Trump International Hotel and Tower, at Columbus Circle. "I'm buying location, location, location," he said.

Mr. Menendes found the one-bedroom, 700-square-foot furnished unit last September with the help of Douglas Russell, a vice president and director at Brown Harris Stevens, paying in the mid-$600,000's for the privilege of living in the apartment up to six months a year. The rest of the time, the abode will be made available as a hotel room.

The proceeds, which Mr. Menendes estimates at 5 percent to 6 percent return per year, will accrue toward the apartment's carrying costs. Mr. Menendes added that he expects the dollar to regain its standing against the euro. "I know that it will end up reversing itself," he said. "When it gets to one-one, I'll make 30 percent appreciation."

Some foreign buyers have enthusiastically embraced the marketers' notion that Central Park South is more a state of mind than a street. Garry Burke, an Irish businessman in his late-40's, said he is considering an investment in Windsor Park, formerly known as the Windsor Hotel, at 100 West 58th Street, a block south of Central Park. Preconstruction prices in the building range from $1,500 to $1,800 a square foot, according to Mr. Burke's agent, Max Dobens of Douglas Elliman. Calling the building "very attractive because of its location between the Essex House and the Plaza," Mr. Burke added: "It's on the park, near restaurants, close to the museums. It's got pretty much everything going for it in terms of what's going on around it."

Other international apartment hunters echo his sentiments. For the first time since the residences at Time Warner Center went on the market in the fall of 2001, the number of overseas buyers equaled domestic buyers in 2004, according to Susan M. deFranca, president of Related Residential Sales.

The redevelopers of the Plaza Hotel are preparing for a similar wave. "We have a long list of Europeans, South Americans and Australians who want to get into the Plaza," said Barbara Evans-Butler, a vice president at the real estate brokerage firm Stribling & Associates, which is marketing the Plaza redevelopment. "A lot of people, especially 40 and over, want some of that Old World charm but also all the services and amenities."

That may be true for some foreign buyers, but plenty of others - surrounded by Old World charm all their lives - eschew it on the shores of the New World. "I'm a very contemporary person when it comes to decoration and so on, and I was really depressed in Paris with those old buildings," said Carola Weisz, 56, an Argentine who seven years ago moved to New York by way of Paris. She and her husband, Claudio, 58, bought a new condominium with the help of Beverly H. Feingold, a vice president at Halstead.

Sometimes, the presence or absence of bold-faced names can influence others in their choice of dwelling.

"Overseas, they read the tabloids or the glamour magazines," said Jacky Teplitzky, an executive vice president at Douglas Elliman whose clients include many South Americans. She said that a wealthy male socialite told her: "I cannot tell you the areas but I'll tell you the buildings where I want to live. Where Nicole Kidman lives, where Beyoncé just bought an apartment, Penélope Cruz, Ricky Martin."

Ms. Teplitzky said she answered: "Well, you just mentioned four people who bought in four different areas. Kidman bought in the Meier building in the meatpacking district, Cruz at the Chelsea Mercantile, Beyoncé at Beacon Court, Ricky Martin at Time Warner." She showed her client each building, Ms. Teplitsky said, and he is now assessing whether the meatpacking district's trendiness may prove ephemeral, especially measured against the established neighborhood encompassing Time Warner Center and One Beacon Court.

Besides Midtown and the 59th Street corridor, downtown is said to be the third major magnet for international buyers.

Among them are the usual suspects, 20- to 30-something buyers without children who "want that whole New York story, either a loft or something in the West Village," said Trina Cooper, an agent at Corcoran, whose youngish clients hail from France, England and Ireland.

But increasingly, another demographic is gravitating below 14th Street"You expect young people to be interested in downtown," said Ms. Evans-Butler of Stribling. "For me it's really quite interesting to see people in their 50's who want to be downtown not so much because of nightlife but because of culture life and because it's the new New York." She added: "People who used to wear suits all their lives, they want to come into New York and do all the culture things and have the lifestyle that is more 21st-century downtown. And so you had them buying into things like Richard Meier buildings, completely different from anything you would have in Europe."

Of course, there's good-different, and there's bad-different. For overseas buyers navigating the already treacherous terrain of Manhattan's real estate, certain distinctions fall into the latter category.

One of the first and hardest lessons swallowed by international shoppers is that co-ops, which make up around two-thirds of the available housing stock, are effectively off limits. Boards turn a notoriously dour eye on applications bearing the slightest whiff of investment-related intent. They also tend to balk at liquid assets located overseas and will not allow investments to be made in a corporate name, as many foreign buyers prefer to do for financial and privacy reasons.

"The difference between co-ops and condos is the big, big, big issue," Ms. Feingold of Halstead said.

With co-ops out of the picture, condos are seeing a glut of foreigners. "We just sold the Lumière on West 53rd between Eighth and Ninth," said Michael Shvo, president of the Shvo Group, which markets and sells luxury condominium developments. "We probably sold 30 to 35 percent to foreigners. It was 0 to 5 percent a year and a half ago."

The developers he works with are taking notice. "The main thing we're doing to accommodate them is concierge service," Mr. Shvo said, explaining that talks are in the works to hire an international concierge service in developments at 20 Pine Street, Bryant Park Tower and another slated for 19th Street and 10th Avenue in Chelsea. A concierge would make restaurant reservations, book airline tickets, stock refrigerators and hire baby sitters, among other services desired by part-time foreign residents.

In addition, some of the apartments are being tweaked to convey the feel of a hotel suite. "We're really trying to give people an experience that even though it's their home, they're away on vacation," Mr. Shvo said. Some bathrooms will have bidets, he said, and kitchens will feature a more minimalist, European approach, employing discreetly sized appliances and other finishes that "make it not pop out so much as a kitchen but more as a piece of furniture."

He added that in the Chelsea building, an effort is under way to put studio apartments next door to one-bedrooms, to enable easy combinations and endear the units to international buyers accustomed to reserving adjoining suites in a hotel.

Pricey apartments are often paired with pricey common charges, which can be a shock to the equilibrium of the international buyer. Carrying charges in Europe are around $300 a month, said Ms. Cliff of Corcoran. "Here they're $3,000 a month. If you're only using an apartment three months in a year, that's a big chunk of carrying charges."

Nancy Candib, a vice president at Brown Harris Stevens, said, "They have to be very wealthy where it doesn't matter and they appreciate the services, or buy a town house, or go to Chelsea and downtown where a lot of the condos don't have doormen and charges can be much less."

Pure investors - those seeking income from tenants - can usually cover the carrying charges with rental income. Others, like Mr. Menendes of Madrid, are turning to the condo-hotel.

Overseas buyers also report being surprised by the bad condition of some of the apartments they view. "You see apartments which are really in terrible, terrible, terrible shape," said Ms. Weisz, the Argentine who relocated to New York seven years ago. "A very important issue if you are a newcomer to no matter where is that you find an apartment where you can really move in."

And then there's the cultural quicksand of negotiation. "In no other place in the world does anybody want to know anything but is the bank going to give you a mortgage and are you willing to pay my price," said Ms. Feingold of Halstead.

"They're used to negotiating more than we are as a culture," said Hall F. Willkie, president of Brown Harris Stevens. In a market where low ball equals foul ball, "they learn very quickly they've got to pay up," he said.

As for bidding wars, while foreigners are said to be more willing to participate than in years past, "You're talking about second residences, and sometimes people don't want to fight for second residences," said Mr. Cohen of Douglas Elliman. "It's a luxury they can afford to wait for."

Or not. "It's always a new chapter in a foreigner's life to have an apartment here," he observed. "Sometimes they come out of divorce. Sometimes they are widows. In some countries in South America, a woman over 45 is done. New York is very receptive, especially to middle age, especially for romance." He added: "It's the best place in the world for finding romance and finding a second chance in life."



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