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When most Americans think about New York, they have images of a city that is fashionable, sophisticated and very expensive. But to foreign investors, New York is one of the best bargains in the world.
"There's been a lot of publicity about the depressed real estate prices in New York City," says Stephen L. Green, chairman of S.L. Green Properties. "By international standards, it's a steal. New York is the Kmart of all cities."
While those pushing tourism here would surely cringe at the image of New York as a budget department store, real estate brokers courting foreign buyers know that the city's bargain basement property values--compared with those of the world's major cities--are a real selling point.
"There's a certain sex appeal and pride of ownership in having a New York property," says Richard B. Baxter, managing director of investment sales at Edward S. Gordon Co.
Sexiness may not be enough, though. The foreign buyers now looking at New York are often doing just that--looking--while signing contracts in cities perceived to have greater stability in real estate values. All are wary of repeating the mistakes made by Japanese investors in the 1980s.
The Japanese and British were the primary foreign investors in the past decade, but the 1990s so far belong to the Germans, Italians and buyers from Hong Kong. Most are first-time investors in New York.
The reason for the shift, area brokers say, is that buyers who purchased at high prices in the 1980s have seen the value of their investment...