Foreign buyers still into NYC property

Pam Liebman, CEO of the Corcoran Group, answers a reporter's questions during the Reuters Global Real Estate and Infrastructure Summit in New York June 14, 2010.

NEW YORK (Reuters) - The sinking euro hasn't seriously derailed foreign appetite for premiere U.S. real estate such as 5th Avenue in New York, at least for now, top real estate professionals said on Monday.

"We thought our foreign buyers would flee, but they haven't as yet," said Pamela Liebman, president and chief executive of chief executive of The Corcoran Group, 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 4-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 said.

The mix of foreign buyers has already shifted over the past two years.

Italians, South Americans, Southeast Asians, Chinese and Russians are in. The Irish and Koreans are out.

Foreign buyers are looking for a safe and secure place to put their money, and they are finding that in the best-known U.S. addresses, said Jay Koster, president of Americas Capital Markets for Jones Lang LaSalle.

"There is tremendous appetite especially if (the address) says 5th Avenue or Park Avenue or Madison Avenue," said Koster, referring to New York's glitzier streets. Foreigners are "buying long-term value or buying stability. They're buying Pennsylvania Avenue in D.C. and they're buying Rodeo Drive (in the Beverly Hills section of Los Angeles). It's broader than Manhattan, but still very finite demand."

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 said.

"The kids want to use the apartment, they are in their 20s, the parents want to use it, maybe the grandparents will use it," she said. "They're not going to rent it out and they plan on holding it for a long period of time."

What's gone, she said, are brokers representing Irish, South American or Korean investors in purchases of multiple units, at times entire buildings.

"What we don't see is people coming in any more to these new these developments where they buy 10 apartments," she said. "These are all one-off deals. In some cases somebody might look to buy two or three apartments."

CAN'T SATISFY NEEDS

While the demand is still there, the supply isn't always sufficient.

"A lot of foreigners want to buy a two-bedroom apartment with nice views in a fully serviced building and there's just not that much out there," Liebman said. "You'd be shocked at how little is out there to satisfy some of these needs."

Koster said foreigners are willing to stretch their limits for the sake of getting sought-after addressees.

"There are many cases where they willing to pay up for the best assets and stretch their parameters rather than buy in the middle of the country," he said.

U.S. mortgage rates have also fallen anew, with 30-year loans averaging near 4-3/4 percent, thanks to the euro zone turbulence. The flight to safety into U.S. Treasuries has pulled down yields used to peg home loan rates, boosting affordability here.

Corcoran has been placing brokers globally to capitalize on foreign demand for properties in New York City, where new building potential is limited and average prices are about 20 percent below their peak.

One Corcoran broker moved recently to China, another to Italy and one travels to Brazil and Argentina every eight weeks, Liebman noted.

"The buying power of the euro has changed but the prices have changed too," said Liebman.

(Reporting by Lynn Adler; Editing by Steve Orlofsky and Richard Chang)