Issue 122 – Foreign Demand Re-Emerges as Luxury Buyers Underwrite Political Risk

As we head into summer, we are seeing a very notable resurgence of international buyers entering the New York market — and frankly, in a way we haven’t seen in years.

Let’s explore why.

Historically, global capital gravitates toward stability, discretion, and internationally recognized assets. In New York City, that typically translates to park-facing residences, trophy properties, and globally recognizable “name-brand” buildings. These include Aman, Four Seasons, Related developments, and legacy Park Avenue or Central Park South product with strong service infrastructure and long-term value preservation.

Right now, buyers are looking for quality, security, and assets that feel insulated in uncertain times. NYC, despite all the headlines, remains a strong, long-term store of value internationally.

When there is instability abroad, New York City benefits. It offers legal transparency, deep liquidity, world-class education, finance, culture, and healthcare — and a real estate market that, while imperfect, is still well understood around the world.

What’s different now is that buyers are not necessarily purchasing because they think New York is “hot.” They are buying because New York is established. That is an important distinction: the capital is less speculative and more preservation-oriented. For many international families, a New York apartment is part lifestyle asset, part hedge, part legacy planning.

The headlines about wealthy buyers fleeing New York City are often too simplistic. Yes, some buyers have moved capital to Florida, Texas, or other lower-tax markets. But that does not mean New York has lost its global relevance.

The newly announced pied-a-terre/second-home tax in New York targets luxury second homes valued at $5 million or more, with the goal of creating an annual surcharge on non-primary residences. This proposal is certainly something international buyers are paying attention to, though it remains to be seen if this will impact continued investment. Rather than eliminating foreign demand, the tax likely makes buyers more selective, becoming part of the broader cost-of-ownership analysis alongside the mansion tax, carrying costs, and currency exposure. It may create pause around marginal purchases, but for a trophy asset, it won’t stop the buyer. It simply raises the bar for what feels worth owning.

The concern is less the dollar amount itself and more the perception. International buyers are highly sensitive to whether a market feels welcoming, predictable, and stable. Policy often moves perception before it moves fundamentals.

We’re consistently seeing foreign buyers generally gravitate toward turnkey product. The appetite for renovation or operational complexity is far lower than it once was. Buyers want ease, service, security, and a property that immediately translates internationally, both from a branding and lifestyle standpoint. For these global buyers, New York remains one of the few carrying both emotional and financial prestige.

Enter: Japanese buyers. The Real Deal recently reported a massive resurgence in Japanese capital, providing a lifeline to aging multifamily walk-ups. “Japan-linked firms have acquired at least $2.1 billion worth of New York City property since the start of 2024, according to analysis by Okada & Company and TRD Data,” the piece details.

This surge is driven by a stark yield gap: With low interest rates at home, Japanese buyers can borrow cheaply in Japan to acquire higher-yielding assets, a strategy supercharged by domestic tax incentives for multi-family purchases.

We are also seeing diversifying residential demand from Australian, Brazilian, Taiwanese, and Western Europe buyers. Eastern European activity is still highly selective compared to prior cycles, but international demand as a whole has undeniably re-entered the market. The usual suspects — such as Central Park South, Tribeca, Billionaire’s Row, and select Downtown properties — remain the primary anchors.

Target price points for these foreign investors vary by country of origin and the purchase’s purpose, with the most active international demand falling into clear segments:.

The serious lifestyle buyer ($3M to $7M): Typically targets a strong two or three bedrooms in a premier building, prioritizing service, security, and an easy lock-and-leave lifestyle.

The wealth-preservation buyer ($7M to $15M+): Focuses heavily on blue-chip locations — Central Park, Fifth Avenue, Park Avenue, Tribeca, Billionaires’ Row — or globally recognized branded residences.

The ultra-high-net-worth buyer: Prioritizes the asset above any price point, focusing on scarcity, pedigree, privacy, views, service, and long-term relevance. They are not asking, “Is this affordable?” They are asking, “Will this matter 10 years from now?”

Today’s foreign buyer is much more disciplined. They want turnkey and certainty. They want building quality, service quality, financial stability, and a residence that translates globally.

The biggest shift is that foreign buyers are not chasing the market — they are underwriting it. They are asking better questions: What are the monthly carrying costs? Who is the resale audience? How strong is the building financially? How liquid is this asset? Does this location hold value in multiple cycles?

Overall, cultural nuance matters more than ever. Buyers are underwriting not just the apartment, but NYC itself.

Five years ago, there was still more appetite for optionality — buyers were more willing to consider renovation, new development premiums, or speculative upside.

On the Japanese side specifically, what I’m noticing is a renewed comfort level with NYC real estate as a legacy asset class. The buyers I’m seeing tend to be highly analytical, long-term focused, and extremely quality-driven. They’re not chasing hype — they’re buying permanence.

The Brazilian and Australian buyers we’re seeing tend to be incredibly lifestyle-oriented while still highly aware of long-term value, whereas many Western European buyers continue to prioritize pedigree buildings, architecture, privacy, and stability. Taiwanese buyers similarly appear very focused on security, quality, and established global positioning.

For foreign investors, New York City still represents something very specific: legal stability, cultural prestige, liquidity, access, education, healthcare, and global identity. The buyers I’m seeing are not ignoring the headlines. They are simply looking past them when the asset is strong enough.

New York is no longer a market where everything trades easily. It is a precision market. But for the right property — the right building, the right view, the right service, the right location — foreign buyers are still very much there.

The common denominator across almost all of them is that they are buying selectively — but decisively — when the product feels globally relevant.

Issue 127 – The Price Isn’t the Price

A new calculation is changing what a New York apartment is actually worth. For decades, NYC real estate has been obsessed with price per square foot. However, now we may be entering the era of cost per year.

Consider two apartments of the same size, price, amenities, light, view, and location. If one has $6,000 in carrying costs and the other $11,000, are they really worth the same amount?

Increasingly, I would argue they are not because buyers aren’t simply purchasing apartments anymore. They are purchasing the economics of the buildings they’re in, which are starting to matter enormously. Think: insurance, labor, utilities, repairs, taxes, assessments, energy compliance, staffing, capital improvements, and reserves. While monumentally important, none of these photograph well, but all determine whether an apartment is easy to own — and eventually sell.

We have always understood that certain characteristics affect value: a lower floor trades differently from a higher one, an awkward layout matters, a protected view commands a premium, and poor light equals a discount. However, I contend another discount is related to the aforementioned carrying costs.

The sexiest amenity in New York real estate may soon be a healthy balance sheet. That sounds less exciting than a lap pool, unless you are the one writing the checks. Operating costs in New York have been rising, putting pressure on building budgets and making previously deferred capital projects harder to ignore.

The 2026 New York City Price Index of Operating Costs — which tracks expenses for the city’s rent-stabilized building stock — illustrates the broader pressure. Over the five years through 2026, insurance costs in that index increased more than 80%. Maintenance increased 29%, utilities more than 26%, administrative costs more than 21%, and labor nearly 16%.

Those figures aren’t a direct proxy for every condominium or cooperative in Manhattan. But they illustrate something anyone involved in operating New York buildings already understands: buildings are getting more expensive to run.

One mistake buyers can make is falling in love with the apartment and treating the building as secondary. In New York, you aren’t just buying four walls; you’re buying into a small economy. You’re inheriting its management decisions, staffing structure, physical plant, reserve philosophy, insurance exposure, and capital planning.

A building that deferred maintenance may appear inexpensive today because it hasn’t yet charged owners for the work it needs. That doesn’t necessarily make it inexpensive. It may mean the bill hasn’t arrived yet. Conversely, a building that recently completed an expensive façade project, replaced major mechanical systems, or invested in energy efficiency may initially appear less attractive because owners have already absorbed those costs. We need to consider which building presents the greater risk over the next decade. The answer isn’t always obvious from the monthly maintenance number.

Buyers understandably love low carrying costs, and brokers value them because they make a property easy to market. But low monthly charges deserve as much scrutiny as high ones. A good broker asks: Why are they low? Is the building extraordinarily well managed? Does it have other income? Are the reserves substantial? Or has the board resisted increasing common charges while postponing expensive work?

An important distinction exists between efficient and underfunded. A well-run building with appropriately funded reserves may ultimately be far more economical than one with artificially low monthly charges followed by recurring assessments. It’s not just the number that is meaningful, but the story behind it.

Few words cause more anxiety in a New York transaction than “assessment.” Even here, context matters because not every assessment is a red flag. An assessment financing a necessary capital improvement can actually strengthen the building. A new roof, elevators, façade work, upgraded mechanical systems, or energy improvements may protect long-term value.

The more important questions a sales pro considers are: What is the assessment for? Why didn’t reserves cover the expense? Is it part of a thoughtful capital plan or the latest in a recurring series of emergencies? And, perhaps most importantly, what comes next? A $500 monthly assessment with a clear end date concerns me considerably less than a building with no assessment, minimal reserves, and several million dollars of foreseeable work.

New York’s environmental requirements add another layer of complexity. Local Law 97 places emissions limits on many large buildings and creates increasingly stringent requirements over time. The encouraging news is that the overwhelming majority of covered privately-owned buildings are currently meeting the applicable limits.

But buyers should still understand what their particular building is facing; Has the Board commissioned the appropriate studies? What capital improvements may eventually be required? Has money been allocated? Is compliance incorporated into long-term planning? The concern isn’t whether a building faces a penalty today; it’s whether the building has a credible plan for tomorrow. That, increasingly, is part of due diligence.

New development creates its own version of this problem. Buyers are understandably attracted to pristine buildings with spectacular amenities and, sometimes, surprisingly reasonable initial common charges, but what will the building actually cost to operate when it is fully functioning?

Pools, spas, private dining rooms, screening rooms, landscaped terraces, playrooms, fitness centers, and mechanical systems all require staff, maintenance, and money long after the sales office closes.

The glossy brochure tells you what you’re getting. The budget tells you what you’re buying — both matter.

This conversation also requires nuance when comparing co-ops and condos. A co-op’s maintenance can initially look dramatically higher because it often incorporates expenses that a condo owner pays separately, including the shareholder’s proportionate share of the building’s real estate taxes. A condo may show a lower common-charge number while property taxes sit alongside it.

So, comparing maintenance to common charges without understanding what each includes is meaningless. The correct question isn’t: Which monthly number is lower? It is: What is my total cost of ownership, and what am I receiving in return? I believe strong building economics will increasingly become an amenity in their own right.

Brokers spend an immense amount of time learning how to talk about marble, appliances, ceiling heights, views, and finishes. We should be equally capable of explaining the financial health of the building we’re selling, because that is a big part of valuation.

None of this means price per square foot is irrelevant. It’s still an important metric. But like any metric, it becomes dangerous when used without context.

I’ve spent my career watching New York buyers pay premiums for things that cannot easily be replicated, including light, views, ceiling height, architecture, location, outdoor space, great proportions. But I always add another thing to the list: financial soundness. That may not command the same emotional response when someone walks through the front door. But increasingly, it may command something just as valuable – confidence, which matters in uncertain markets.

For years, we’ve asked buyers how much apartment they can afford. Now we need to start asking them how much building they can afford.  Because in New York, you don’t just buy the apartment — you inherit the economics beneath it.

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