July 16, 2014

A new challenge for Real Bay Area Real Estate

Thanks to Burbed reader Nomadic for this find:

Stash Pad

Those on the New York end of the transaction often don’t know—or don’t care to find out—the exact derivation of foreign money involved in these transactions. “Sometimes they come in with wires,” says Luigi Rosabianca. “Sometimes they come in with suitcases.” Most of the time, the motivation behind this movement of cash, and buyers’ desire for privacy, is legitimate, but sometimes it’s not. An inquiry by theInternational Consortium of Investigative Journalists, a Washington-based nonprofit, has uncovered numerous cases in which New York real estate figured in foreign financial- and political-corruption scandals. “It’s something that is never discussed, but it’s the elephant in the room,” says Rosabianca. “Real estate is a wonderful way to cleanse money. Once you buy real estate, the derivation of that cash is forgotten.”

More typically, though, foreign buyers are searching for a favorable investment climate and the identity protection provided by an LLC. Rosabianca’s client, the Italian, lives in Nigeria, where her husband is in the oil business. But she said she was still a tax resident of her home country, giving me a knowing look. Italy taxes its citizens’ overseas assets—if it can find them. “To invest in Italy now is terrible,” she said. So the Italian spent most of her Sunday in taxis, bouncing from Gramercy to Tribeca to the High Line in search of the right place to store her wealth.

She ended up back downtown at 75 Wall Street, where she saw a unit she liked: a one-bedroom belonging to a Panamanian-owned company. She ended up making an offer on both that one and the condo at 20 Pine, but ultimately settled on yet another unit at 75 Wall for $1.3 million. The seller was also an LLC, its true owner unknown.

(Click to enlarge)

How unfortunate. How very, very, very unfortunate.

Not once does this article mention the Real Bay Area. Where is Cupertino in any of this? Palo Alto? Even San Francisco?

Why is New York getting all this laundered money?

Dear Russians, Nigerians, Chinese, Brazilians – the Real Bay Area is just as prestigious as Manhattan and London. Please send your millions of dollars in cash and loose diamonds here. We need your help to drive real estate to $5,000 per square foot!

Please act today!

Comments (1) -- Posted by: burbed @ 5:05 am

One Response to “A new challenge for Real Bay Area Real Estate”

  1. nomadic Says:

    From the last section:
    “How deep is the market?” asks Michael Stern, who is building a 1,350-foot-tall tower at 111 West 57th Street, designed by SHoP Architects. “I don’t know, and neither does anyone else.” But while no one can discern the ceiling on pricing, there’s a hard reality to the floor. Stern says that once land and construction costs are figured in, the break-even point for ultraluxury towers such as his is around $5,000 a square foot. In other words: On average, every inch of these buildings must sell for 30 percent more than Manhattan’s most expensive penthouse did a decade ago.

    It’ll be interesting to see if things fall apart before or after the developers unload their inventory. But I think we can be sure we won’t see any changes in the laws to prevent money laundering.


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