Word has it that the most coveted residential developments are now selling off floor plans once again. Similarly, we're starting to see buyers purchase investment properties site unseen, relying heavily on their broker's opinion.
In a recent case, an Israeli buyer purchased a three-family townhouse at 117 Bedford Street (aka 128 Christopher Street) in this fashion. He purchased the property, located on the southwest corner of Christopher Street in Manhattan's Greenwich Village Historic District, in an all cash transaction for $3,658,000, equating to $1,043 per square foot or a 3.5% cap rate.
According to his broker, Yossi Foler from Streetwise Properties, this buyer was looking to diversify his holdings by buying in the US. He was focused on turn-key properties in the most desirable locations and was willing to accept a low initial return for future upside potential.
The property was built in 1843. The 17' x 42' property with 3,500 SF was originally a four-story, single-family, Greek Revival townhouse. It was then converted to a mixed-use property with a storefront and later configured as three fair market apartments including a three-bedroom duplex, a one-bedroom unit and a ground floor duplex.
This buyer may look into converting it back to retail on the ground floor one day, but for now, is happy with the in place cash flow.
Foreign buyers are not the only ones who buy site unseen. I recently sold a townhouse at 14 East 11th Street for $7,649,200 to an owner who was moving to the West Village. He was overseas when the bid deadline arrived, so I took a video of the property and emailed it to him. This was enough for him to make a decision to bid and contract on the property shortly thereafter.
Regardless, foreign buyers are continuing to make their presence known. Many who were adversely affected in the downturn in secondary and tertiary cities are now insisting on investing in New York City. Foreign buyers, such as Carlos Slim, have been attracting attention for making a splash in this market.
Our website has received visitors from 131 different countries and we are finding that buyers are coming from all over the world. In another case, we had a Greek investor purchase a loan for a large development site in the South Street Seaport. He wired in $30,000,000 on December 31, 2010 to complete the transaction. In this case, he did at least walk the property before making the purchase.