As the New York real estate industry navigates a new normal of slow sales and an oversupply of luxury listings, investment interest is coming from an unexpected place — Italy.
Italian buyers, seeking a place to park their money as their country’s economy continues to reel after being hit hard by the coronavirus, are seeing the potential for better deals during the current climate and expect the market to rebound strongly in the coming years, similar to activity in the wake of 9/11 and the 2008 financial crisis.
Andrea Pedicini of Corcoran, a native of Italy who has long worked with investors from his home country, says that in the month since Italy started to ease its lockdown restrictions, he received a surprising number of inquiries from both new and repeat clients.
All told Pedicini says he’s currently working with more than 30 new leads and four previous clients, all eager to invest in New York-area real estate in the next six to nine months.
“In times like this, Italians look at New York as literally a safe haven,” says Pedicini, who was born and raised in Venice.
After he started receiving calls, Pedicini began advertising on social media
Sergio Iorio, a longtime client of Pedicini’s, used to live on the Upper West Side and several years ago invested in one-bedroom units in renter-friendly luxury condo buildings in Brooklyn’s DUMBO neighborhood, and says the value of those properties doubled.
While timing the market is difficult, and it’s uncertain whether New York has seen its bottom, today buyers in New York have more negotiating power, says Iorio, who is chief executive officer of Italmatch Chemicals, one of Europe’s largest chemical companies.
“I would like to continue to invest a percentage of my assets into New York because I believe in the long term,” Iorio says.
Corcoran agent Sebastian Steinau has also recently seen an uptick in interest from international investors and is currently representing clients from Germany, Switzerland, the UK, Canada, South Africa, Singapore, the Middle East, Brazil and Argentina. They are particularly interested in townhouses and well-managed, smaller boutique buildings.
“It is no secret that luxury inventory in Manhattan is oversupplied,” Steinau says. “Throughout the last two years, buyers could already take advantage of price corrections underlined by increased seller flexibility. Simply put, there were deals to be had. Interestingly and to the benefit of the buyer, the effects of the recent global pandemic have caused yet another ‘tipping point.’ In particular, developers are eager to transact and move their inventory. Having lost almost three months of the traditionally very busy spring season, select sellers are ready to boost activity as the city enters into Phase 2. This leads to increased negotiability in many cases to catch up. Closing costs, common charges, certain building amenities as parking spaces, storage units, wine cellars, private roof top cabanas – all is on the negotiation table.”
Most of Steinau’s clients are holding off from pulling the trigger, waiting for the restrictions on both private and commercial aviation to loosen so they can see properties in person.
“Once a semblance of a ‘new normal’ is reached in the skies, I see considerable private touch-downs at the (fixed-based operators) of Teterboro or White Plains by buyers coming from overseas to look at Manhattan properties,” Steinau says.
The agents see the pandemic as another blip in the market and don’t think it will forever change the New York market. While after 9/11, some people were afraid of other terrorist attacks, real estate saw a significant rebound.
“I don’t think this is the end of New York,” Pedicini says.