For foreign companies in New York, it's a huge cost of doing business: Employees move to the city or come here on assignment and the company has to put them up in temporary corporate housing that routinely exceeds US$4,000 a month.
But a growing number of foreign firms are buying up high-end Manhattan condominium apartments and taking on the role of landlord themselves, brokers say. The companies, many from Europe and Asia, say the strategy makes perfect sense because of the booming Manhattan real estate market and the favorable exchange rate.
"The companies used to say, we're only going to have people here for so long, so there's no need to purchase. But now there is a change from that direction," said Daniel Baum, chief operating officer of The Real Estate Group NY. "They think, even if our people aren't there, this is a good investment opportunity for us in New York City."
PHOTO: AP
The trend mirrors what is happening in the larger New York real estate market among foreign buyers. With their currencies hitting record highs against the sliding US dollar, Europeans are snatching up Manhattan apartments and essentially getting twice the value because of the exchange rate.
The New York real estate market has been on a roll for a number of years, despite the turmoil around the country. The average price of a home in Manhattan last year was US$1.26 million, up 11 percent from the previous year, according to the Real Estate Board of New York.
But for some overseas companies, New York is a relative bargain. A survey last year showed that New York was the 15th most expensive city in the world, behind places like London and Moscow.
Foreigners are purchasing nearly twice as much property here as they were two years ago, helping the city survive the nationwide housing crisis, real estate watchers say.
"The exchange rate has really made the economics one of the driving factors here in the condo market," said Jonathan Miller, executive vice president and director of research at real estate research company Radar Logic.
Now the trend is spreading into the corporate world.
The Real Estate Group NY sold four condos and made plans to sell eight more to an Irish investment firm for corporate housing last year. The Corcoran Group is working with a South Korean company hoping to buy blocks of apartments downtown for employees and it is discussing options with various Moscow firms.
The circumstances could not be better for overseas companies who regularly have employees in the city on business. Rather than paying more than US$4,000 per month in rent for condos in Midtown and the Financial District, they are opting to purchase units for US$1 million a piece and allowing the brokers to sublet them when their employees are not using them, helping subsidize the high cost of the apartments.
"It's a win-win for them, if they've got to move people here anyway and housing prices are so good. And there's a weak dollar. They can kill two birds with one stone," Baum said.
Neal Sroka, a broker at The Corcoran Group, said an increasing number of his clients would rather have an empty apartment in the city with the option of subletting to one of the ever-growing number of interested renters, than pay rent for employees on short trips.
And hotels are not a cheap option for companies either, with mid-range hotels costing US$200 to US$300 per night.
Many also see it as an investment in a booming market, with a strong chance that their investment will hold up better than real estate in other cities.
"The companies want to save money, but they are also interested in investing in the future, putting their money where they feel it's going to be safe," Baum said.
SECURITY: As China is ‘reshaping’ Hong Kong’s population, Taiwan must raise the eligibility threshold for applications from Hong Kongers, Chiu Chui-cheng said When Hong Kong and Macau citizens apply for residency in Taiwan, it would be under a new category that includes a “national security observation period,” Mainland Affairs Council (MAC) Minister Chiu Chui-cheng (邱垂正) said yesterday. President William Lai (賴清德) on March 13 announced 17 strategies to counter China’s aggression toward Taiwan, including incorporating national security considerations into the review process for residency applications from Hong Kong and Macau citizens. The situation in Hong Kong is constantly changing, Chiu said to media yesterday on the sidelines of the Taipei Technology Run hosted by the Taipei Neihu Technology Park Development Association. With
CARROT AND STICK: While unrelenting in its military threats, China attracted nearly 40,000 Taiwanese to over 400 business events last year Nearly 40,000 Taiwanese last year joined industry events in China, such as conferences and trade fairs, supported by the Chinese government, a study showed yesterday, as Beijing ramps up a charm offensive toward Taipei alongside military pressure. China has long taken a carrot-and-stick approach to Taiwan, threatening it with the prospect of military action while reaching out to those it believes are amenable to Beijing’s point of view. Taiwanese security officials are wary of what they see as Beijing’s influence campaigns to sway public opinion after Taipei and Beijing gradually resumed travel links halted by the COVID-19 pandemic, but the scale of
A US Marine Corps regiment equipped with Naval Strike Missiles (NSM) is set to participate in the upcoming Balikatan 25 exercise in the Luzon Strait, marking the system’s first-ever deployment in the Philippines. US and Philippine officials have separately confirmed that the Navy Marine Expeditionary Ship Interdiction System (NMESIS) — the mobile launch platform for the Naval Strike Missile — would take part in the joint exercise. The missiles are being deployed to “a strategic first island chain chokepoint” in the waters between Taiwan proper and the Philippines, US-based Naval News reported. “The Luzon Strait and Bashi Channel represent a critical access
Pope Francis is be laid to rest on Saturday after lying in state for three days in St Peter’s Basilica, where the faithful are expected to flock to pay their respects to history’s first Latin American pontiff. The cardinals met yesterday in the Vatican’s synod hall to chart the next steps before a conclave begins to choose Francis’ successor, as condolences poured in from around the world. According to current norms, the conclave must begin between May 5 and 10. The cardinals set the funeral for Saturday at 10am in St Peter’s Square, to be celebrated by the dean of the College