RISMEDIA, June 16, 2010—As the Reuters Global Real Estate and Infrastructure Summit kicked off this week, some of the world’s leading names in the international real estate community will gather to discuss the outlook for the real estate and infrastructure sector.
No Foreign Exodus from NYC Property Market, Yet
The sinking euro hasn’t seriously derailed foreign appetite for New York City real estate, at least for now, said Pamela Liebman, president and chief executive of The Corcoran Group. “We thought our foreign buyers would flee, but they haven’t as yet,” she said recently at the Reuters Global Real Estate and Infrastructure Summit in New York.
The next four to eight weeks will reveal whether the euro zone market chaos that recently swept the single currency to a four-year low will eat away at foreign demand for Manhattan properties, she said.
“It still feels as good as it did before the euro crisis, but we’re waiting to see, and it’s nowhere near what it was with the condo boom,” Liebman told Reuters.
The mix of foreign buyers has already shifted over the past two years. Italians, South Americans and Russians are in. The Irish and Koreans are out. The current buyers are typically wealthy and looking to buy for families for the long term rather than to flip. Corcoran recently closed an $8 million condo sale in the Trump International building, with Central Park views, for a South American family, Liebman told Reuters.
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Commercial Real Estate Gaining Strength
The collapse of the U.S. real estate bubble will not be as crushing as many had anticipated, a top executive for real estate services company Jones Lang LaSalle Inc. (JLL.N) said recently at the Reuters Global Real Estate and Infrastructure Summit in New York.
After investment firm Lehman Brothers fell in September 2008, real estate investors worried there would be a widespread sell-off of debt-laden commercial properties.
While the values of office buildings and other commercial properties have fallen, the anticipated flood of foreclosures and bankruptcies has not occurred, and probably will not, said James Koster, president of Jones Lang LaSalle’s capital markets group. “We should be in a relatively good position to not have this other shoe drop,” Koster told Reuters.
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Manhattan Buyers Seek Comfort over Prestige
Scorched by a real estate crash, New York buyers are finally returning, but this time they want a comfortable home rather than a quick flip. And like never before, they don’t want anyone to know what they are buying.
“People are now looking at things in a different way,” Pam Liebman, president of Realogy Corp’s Corcoran Group unit, said recently at the Reuters Global Real Estate and Infrastructure Summit in New York.
Buyers are now asking themselves what would make them happy, said Liebman, whose company is one of the largest residential real estate companies in New York City. “It’s not an investment; it’s not a flip. It’s much more a traditional investment than a flip.” Liebman told Reuters that state of normalcy is far from normal in a city marked by booms and busts in its property market. She said at the Reuters Summit she expected to see prices slowly rise as the economy gets stronger.
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LeFrak Reaches to London for Bank and Property
New York City real estate developer and investor Richard LeFrak is extending his reach to London, buying a piece of the country’s first new High Street bank in over a century and negotiating a deal for a multifamily property.
LeFrak, chief executive officer of the LeFrak Organization, said at the Reuters Global Real Estate and Infrastructure Summit in New York that now is a good time to invest in property in London.
The British pound has fallen, London is “the best city in Europe,” and there is a shortage of housing, he told Reuters. “You can actually get a title policy that says you own it, instead of most places you go around the world.”
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