New York Real Estate Feels Moscow Chill

Global Business

New York City’s real estate market has always attracted international buyers – many of them Russian – who have snapped up some of Manhattan’s priciest properties. But now many Russian buyers are putting their purchasing plans on hold as they await the political fallout of rising tensions between Russia and the United States. Karina Huber has more.

New York Real Estate Feels Moscow Chill

New York Real Estate Feels Moscow Chill

New York City's real estate market has always attracted international buyers - many of them Russian - who have snapped up some of Manhattan's priciest properties. But now many Russian buyers are putting their purchasing plans on hold as they await the political fallout of rising tensions between Russia and the United States. Karina Huber has more.

An apartment in this building in Manhattan sold for a record 88 million dollars. The buyer: Russian fertilizer magnate Dmitry Rybolovlev.

Three apartments in the pricey Plaza Hotel were bought by another wealthy Russian: composer Igor Krutoy.

Russians account for an estimated 20 to 30 percent of all foreign buyers in New York City.

But rising tensions between the United States and Russia is causing some of those buyers to shy away.

Elliott Bogod, President, Broadway Realty, says: “We had couple of clients who paused and said let’s not look to buy just now. We’ll come back to this in one or two months. Let’s see how the situation will settle.”

Realtor Elliott Bogod has many Russian clients. One of them bought this apartment as an investment. It rents out for 11,000 dollars a month.

“They looking sometimes to buy and hold and to have it as a pied-a-terre, sometimes they have their children who studying in Columbia, NYU” says Elliott Bogod.

He also says most of his clients are looking for properties in the 1 to 3 million dollar range but he has others looking to spend up to 10 million dollars. “They tend to buy expensive apartments in good areas.”

Bogod says the two clients who have backed out of deals are worried about more sanctions that could potentially hurt their businesses. But Bogod isn’t worried about the impact on his business. He says there is no shortage of foreign buyers from other countries like China and Brazil looking for properties that can make up the difference.

But he concedes that a drop in interest from Russian buyers could hurt the super high end-developments in Manhattan that have a much more limited pool of potential buyers.

Russian buyers may have cold feet right now but New York is considered one of the world’s most active real estate markets, making prices relatively resilient after big economic swings. Real estate agents say if Russia’s economy deteriorates further, the city could see an influx of Russian buyers seeking a safe place to park their assets. For now though, they seem to be in a wait and see mode.