DATE: 5/22/2010 12:00:00 AM
TITLE: Not just basketball drawing Russians to New York
Russian billionaire Mikhail Prokhorov may not be moving to New York to oversee his recently acquired New Jersey Nets basketball team, but many other wealthy Russians are keen to live in the city, say experts.
New York has long attracted Moscow's billionaires, but some experts say more of the country's millionaires are now looking to buy in the city and the $200 million investment by Prokhorov could persuade additional Russians to make the move.
"It will certainly create a greater profile and is likely to be an inducement or at least increase interest in the New York market," said Michael Slattery, executive vice president of The Real Estate Board of New York.
New York City is already home to nearly a quarter of a million Russians, according to U.S.government data, and more than 94,000 Russians visited the city during 2009. The top two homes for the world's billionaires are New York and Moscow, according to Forbes Magazine.
Russia is recovering from the global financial crisis of 2008-2009, which sparked the country's first recession in a decade, and some experts said this has caused Russia's wealthy to become a little more frugal with their wealth.
After Russian interest in New York City declined during the economic downturn, experts say they are now returning.
Victoria Shtainer, a senior vice president at Prudential Douglas Elliman, said that in the past three or four months she had noticed an increase in Russians looking to buy in New York, but that their budgets were noticeably less.
Instead of spending tens of millions of dollars on a property, Shtainer, who is Russian, said they were looking at properties with pricetags around $5 million.
"They want to try (New York) out and see what it's like before putting in the big money," she said. "Before money was no object, they were making a ton of it, nobody felt like the world was coming to an end.
"Now they feel like the world has come to an end they're more frugal," said Shtainer, adding that Prokhorov's purchase could influence more Russians to try New York. "But compared to Moscow prices New York is reasonable."
But Loy Carlos, marketing director of the international division of the Corcoran Group, said that for the Russian buyers his company has dealt with, budgets are not usually a problem.
He said Russians are among the leading foreign buyers of New York real estate.
"They tend to like and want to purchase very good investments and to them that means trophy properties or best of class properties," Carlos said. "Price is really less relevant than whether they like it or not."
"There have been quite a few Russians purchasing in New York, but I think that's the case because there has been in the last month a few more properties available that they are interested in," he said.
"They feel New York City real estate is a solid investment."