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Flush with cash, Irish investors buy condos in Manhattan

Weak dollar tied to buying spree

NEW YORK -- They live an ocean away, but that has not stopped the Irish from lining up to buy condominiums in midtown Manhattan, often years before they are built.

In some cases, entire buildings or large blocks of apartments in unfinished highrises are being sold to Irish investors hungry to own a piece of New York City.

Neil McCann, an entrepreneur in Belfast, said he joined the rush of would-be Manhattan landlords last year when he signed a contract to buy a one-bedroom apartment near Gramercy Park for $600,000.

"It's an Irishman's dream to be able to go to Manhattan and be able to buy property there," said McCann, 36, who added that he hoped to buy more New York apartments because with a weak dollar, they are relative bargains compared with real estate in Ireland and Britain.

After a long economic boom that earned their country the nickname the Celtic Tiger, the Irish are flush with cash and searching the globe for places to invest it.

The westward flow of money "seems to be another example of how, in the wake of the Celtic Tiger, the relationship between Ireland and the United States has flipped," said Linda Dowling Almeida, who teaches Irish studies at New York University.

The buyers do not even have to travel to New York, because the sellers are coming to them. Armed with glossy brochures about amenity-laden towers, New York brokers such as Anne Marie Moriarty, of the Corcoran Group, have been dropping in to Dublin and Belfast and taking deposits.

"Most of these people are buying one or two apartments at a time," said Moriarty, who has specialized in selling to the Irish for about 2 1/2 years.

"Many of them buy off plan, because they're fearless," she added, referring to the custom of putting money down on apartments long before they are completed.

People from all over the world have been contributing to the sustained demand for apartments in Manhattan. But developers and brokers said the Irish seem to be the voracious newcomers of the moment, though their purchases have drawn less attention than previous buying sprees by the Japanese and the Saudis, who made splashes by acquiring trophy properties such as Rockefeller Center and the Plaza hotel.

"Because of the weak dollar, we're seeing a lot of European buyers and it just seems like there's a disproportionate amount from Ireland," said Jonathan J. Miller, president of Miller Samuel, a real estate consulting company.

Jules Demchick, who has developed several buildings in Manhattan, said the Irish are following a long parade of foreign buyers. "I've seen the Persians and the French and the Dutch and the Germans and the South Americans do this," said Demchick, the president of J.D. Carlisle.

Still, he said he was surprised when Cathal McGinley, managing director of the Irish broker Kean Mahony Smith, offered to take a block of apartments in the Centria, a high-rise near Rockefeller Center, and sell them in Ireland.

After McGinley's company quickly sold the first 25, he came back for more. Eventually, most of the units in the building were sold to Irish investors, most of whom planned to rent them.

"Bar none, the No. 1 investment strategy for an Irish person is through property," McGinley said. "Your average Joe on the street has probably got two, three, four, five residential assets. It's considered to be a safe play."

To them, an apartment in the center of Manhattan, no matter if it measures only 800 square feet, is a "trophy asset," McGinley said.

His company also sold more than 60 apartments in the Atelier, a new building on the west end of 42 d Street.

Jay Eisenstadt, whose company is developing a 43-story condominium on Eighth Avenue in the theater district, said he planned to sell all 122 units in the building to another company based in Dublin, the Sorrento Group, which would then resell them to investors. Selling them as a block is more cost-effective than lining up buyers one by one, Eisenstadt said.

"The amount of money floating around over here is just phenomenal," said Bryan Turley, Sorrento's chief executive. "At some stage it has to leave the island. If you follow where Irish money is going, a good deal of it is going into property."

Turley said his company had bought a piece of land near the Empire State Building, where a construction company owned by two brothers from County Kerry will build a 110-unit apartment building. Sorrento will then buy the finished building and sell the apartments, probably mostly to Irish buyers, he said.

At the heart of this investment surge lies some simple math, brokers said. With the dollar at historically low levels against the euro and the British pound, apartments generally cost less in Manhattan than in Dublin or London. But they still rent for more in Manhattan.

"Even if they could afford to buy in Dublin," Moriarty said, "they could not get rent anywhere near what they get here."

For example, said Kevin Harmon, a broker with Savills Hamilton Osbourne King, a real estate company in Dublin, a luxurious one-bedroom apartment selling for $900,000 in Manhattan would cost about 665,000 euros.

"For 665,000 euros, you'd buy a very nice two- or three-bedroom apartment in a good development" in the Dublin area, Harmon said. But the rent on the apartment in Dublin would be about 2000 euros, or $2,700 a month, while the place in New York would rent for about $4,000 a month, he said.