South American Money

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By Ian Slater | April 16th, 2020
 
An article was shared many times with me yesterday about a South American family buying eight Manhattan new development apartments for a grand total of $27M, with the understanding that they were “safer than a bank” in the time of coronavirus.
 
Yesterday also brought the news that the penthouse at Quay Tower in Brooklyn closed for the highest price ever paid for a Brooklyn apartment, and there was another closing at 220 Central Park South for north of $50,000,000. These last two pieces of news should be taken with a grain of salt, as the Quay Tower deal was inked over a year ago and it is likely that the 220 Central Park South deal was inked several years ago. 
 
But, these deals and closings in the time of extraordinary crisis are remarkable for several reasons, and give me a mixture of hope and fear at the same time. 
 
First, they are a reminder that the wealthy deem New York to be safe and desirable, and are willing to pay top dollar to own real estate there, particularly in premiere buildings. Specifically for the South American family, the fact that they note that Manhattan real estate is “safer than a bank” proves the enduring belief in the long-term value of our property. This is a great thing to keep in mind, particularly from the international community. With a storm of voices saying that the market is going to drop precipitously, these facts can be interesting counter-data points.
 
Second, it is a commentary on how the COVID-19 crisis is being interpreted differently in different areas of the world. This is the frightening part. The fact that a clearly very wealthy family is looking to store money in a hard asset rather than banks in their country shows that for the less developed world, there is a real fear that the virus will have a much greater impact on economies than it has had in the US, Asia and Europe (and it has clearly had quite a profound effect on these areas, already). Perhaps they even believe that it will be a short term decimation of the economy and want their assets out. 
 
Expanding on my post the other day a bit about international interest in NYC: we may see a very real return of the wealthy international buyer looking for stable assets, something I personally haven’t witnessed much of since 2013/2014. Even at the peak, this represented an incredibly small portion of the marketplace, but was something that we certainly witnessed. I am curious to see what happens as the virus spreads into these countries and how families react.
 
 
 

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