On October 4th HSBC sold its headquarters to Israeli firm Koor Industries and Property and Building for $330 million. The deal signals that foreign investors currently see Manhattan real estate as a bargain, experts say. Foreign buyers have been looking at the Manhattan real estate market for the past year, and the general feeling is that if the market has not hit a bottom yet, it is pretty close to it.
Other foreign firms are also expecting prices to soon see a rebound. Over the summer, Youngwoo & Associates and Korea-based Kumho Investment Bank reached a deal to buy 70 Pine St. and 72 Wall St. from AIG for what sources say was about $110 million. Youngwoo reportedly said it plans to turn 70 Pine into a residential condo, and are extremely optimistic about selling, expecting units to fetch $2,000 a square foot. Israel-based Optibase and an American partner agreed to buy half of 485 Lexington Ave. with a plan to buy the remainder later. The deal values the 500,000-square-foot tower at $504 million.
Experts say that buyers can now purchase office buildings for about $800 a square foot, without land costs—far less than it would cost to build them. In the first nine months of 2009 sales of properties priced at $10 million and over were down 80 percent from the year-earlier period. Although firms looking to buy are still struggling with the acute lack of financing, it appears that overall foreign buyers see now as the time to invest Manhattan real estate. The market may be at its bottom—and the rest of the world is not letting this opportunity pass it by.
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