Monday, August 29, 2011

Russians Prop Up the Luxury Housing Market

Russians Prop Up the Luxury Housing Market

Nothing elevates Russian status like an expensive home, so millionaires are snapping up properties in L.A., New York, and Miami

Internet investor Yuri Milner paid $100 million for this Northern California mansion

Internet investor Yuri Milner paid $100 million for this Northern California mansion Edward Pfeiffer

By and

Roustam Tariko, billionaire owner of Russian Standard Bank and Russian Standard Vodka, bought a $25.5 million estate on Star Island in Miami Beach in April—the priciest purchase in the city since 2006. Tariko’s neighbor? Vladislav Doronin, chairman of Moscow-based real estate developer Capital Group, who paid $16 million in 2009 for the Star Island home previously owned by Shaquille O’Neal. “In Russia, it’s a status thing now,” says Jorge Uribe, a real estate agent with One Sotheby’s International Realty in Coral Gables, Fla. “If you’re wealthy and you say you have a place in Miami, it’s like saying back in the old days, ‘I own a place in Ibiza or Monaco.’ It’s a cocktail conversation thing.”

Russians and other overseas shoppers are buying some of the priciest homes in America as the broader housing market slumps and a weak dollar makes U.S. property more of a bargain, according to real estate brokers who handle luxury properties. International buyers purchased an estimated $82 billion worth of U.S. homes in the 12 months ended on Mar. 31, a 24 percent increase from the previous 12 months, the National Association of Realtors reported in May. Jed Smith, managing director of quantitative research for the association, says the number of overseas buyers for multimillion-dollar homes is increasing, helped by the rise of emerging markets such as Russia, Brazil, China, and India.

Another factor is the weakening U.S. currency: Among emerging-market currencies, the Russian ruble increased 9.4 percent against the dollar in the 12 months through July, while the Brazilian real advanced 13 percent and the Chinese yuan gained 5.2 percent, according to data compiled by Bloomberg.

For Russians, interest in luxury properties may be as much about making a statement as snaring a bargain, says Edward A. Mermelstein, a real estate attorney at Rheem Bell & Mermelstein, which has offices in New York and Moscow. “Those trophies, they’re buying them to make a splash,” he says. “They’ll definitely gravitate to a property that’s higher profile as much as to a property with a long-term investment potential.”

Yuri Milner, founder of Moscow-based DST Global, which invests in Internet companies including Facebook, Twitter, and Groupon, paid $100 million for a 25,500-square-foot mansion in Los Altos Hills, Calif., according to property records. That price is the highest for a U.S. single-family home this year. A spokesman for Milner declined to comment on the purchase. In Southern California, about 75 percent of the people looking at “super luxury homes” for $20 million or more are from countries such as China, Indonesia, Korea, and Russia, says Sally Forster Jones, a Beverly Hills broker.

In Manhattan, Russian composer Igor Krutoy and his wife, Olga, paid $48 million for a 6,000-sq.-ft. apartment at the Plaza Hotel in March—a record price for a Manhattan condo. The deal came six months after the couple completed the purchase of a $12.85 million home in the Hamptons on Long Island. Krutoy bought the Manhattan property because he was seeking a home in the city, rather than looking to take advantage of a bargain, says Ilya Bykov, principal at Protax Services, a New York-based firm that provides legal, tax, and property management services for international clients. Bykov represented Krutoy in his search, negotiation, and closing for the Plaza condo and helped provide legal representation for the Hamptons home. Russian buyers, he says, “have the money, and they always want the best in everything.”

The bottom line: Wealthy Russians and other foreign buyers spent an estimated $82 billion on U.S. homes in the 12 months through Mar. 31.

Gittelsohn is a reporter for Bloomberg News. Carmiel is a reporter for Bloomberg News.

Wednesday, August 24, 2011

The Dark Knight Sequel Untitled (Warner Bros./Batman Sequel)

As Batman deals with his new status as a wanted vigilante, he must also contend with two new enemies, Bane and Catwoman.

Starring: Christian Bale, Michael Caine, Gary Oldman, Morgan Freeman, Anne Hathaway
Action/Adventure, Crime/Gangster, Adaptation and Sequel
July 20th, 2012 (wide)
Rating: Not yet rated.

Batman 3
The Dark Knight Sequel
Untitled (Warner Bros./Batman Sequel)
Production Status: In Production/Awaiting Release
Logline: As Batman deals with his new status as a wanted vigilante, he must also contend with two new enemies, Bane and Catwoman.
Genres: Action/Adventure, Crime/Gangster, Adaptation and Sequel
Release Date: July 20th, 2012 (wide)
Warner Bros. Pictures Distribution
Production Co.:
Syncopy Films
Warner Bros. Pictures
Filming Locations:
London, England, United Kingdom
Jodhphur, Rajasthan, India
Pittsburgh, Pennsylvania, USA
Los Angeles, California, USA
Produced in: United States

5 questions for attorney Edward Mermelstein

October 07, 2010 10:30AM

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Ed Mermelstein
Edward Mermelstein, 42, is a partner at law firm Rheem Bell & Mermelstein, which focuses on commercial and residential real estate. In the spring, Mermelstein merged his Edward A. Mermelstein & Associates with Uel Rheem and Christine Bell to form the boutique firm that now has 11 attorneys. He spoke to The Real Deal about the difficulty foreigner buyers have purchasing cooperatives units in New York, the unrealistic expectations some overseas investors have about commercial real estate and that now is the time to buy land in Lower Manhattan.

Why is it often difficult for employees of foreign governments such as United Nations representatives, to get approval from cooperative boards? Basically financial transparency is very difficult for government employees. It is typical of almost every government where you are showing an income of X amount but your primary source of income is coming from elsewhere.

How does New York rank against other international cities for the number of foreign investors of residential and commercial real estate? We are definitely trailing London in terms of residential acquisitions. And I think Western Europe is definitely in many ways ahead of us in terms of foreign money that is emanating from the Arab states and the African states.

Are Arab and African investors beginning to increase their spending here? We slowly are starting to see some funds come in from that part of the world. But what we were seeing prior to 2008 has definitely diminished in many ways by 90 to 95 percent.

Are unrealistic expectations for high capitalization rates holding back foreign investment, despite a desire from overseas to buy modern office buildings in Manhattan? There is a lot of interest in Class A office properties. I just had a call [yesterday] morning from an investor [who said], "Find me a Class A office property that is a 6 or 7 cap." I said, "I'm sorry, that just doesn't exist any more."

What Manhattan real estate story should be getting more attention from the media? I think the land prices today, even though many [parcels] are not being marketed, the numbers are down so significantly it makes sense to go after land especially in the Downtown area. If you are making a fair offer in the sub-$200 [per square foot] range, if you can buy land, it may work out in the end.

Edward Mermelstein Named One of 'The Lawyers You Call' by The New York Observer

International Real Estate Lawyer, Broker and Developer Described as 'A certified triple threat,' 'One of the hippest attorneys in the city' and on list of 'Topmost legal eagles' in the Real Estate World

NEW YORK, Nov. 25 /PRNewswire/ -- International real estate attorney, broker and developer, Edward Mermelstein, is featured in December's The New York Observer as one of "The Lawyers You Call." He is one of 11 lawyers in New York City awarded this prestigious title in 2009. Mermelstein, co-founder of international real estate law firm, Edward A. Mermelstein & Associates, with offices in Manhattan and Moscow, draws an eclectic international clientele, most notably among the real estate and commodity elite in Eastern Europe, whom he has represented ten times over at 50 Central Park West, arguably the most exclusive urban address in the United States.

"I am humbled and honored to have been selected amongst the city's best lawyers," said Edward A. Mermelstein. "This year has been an interesting one for real estate, to say the least, and I am optimistic that things will only get better from here. We look forward to continuing to work in all aspects of real estate and thank all of our clients and associates."

Mermelstein is internationally recognized as a go-to resource for high-profile real estate transactions, specializing in connecting clients from around the world to real estate opportunities in the US, Russia, Ukraine, as well as other emerging markets. He represents high exposure Eastern European "Oligarchs," politicians and corporations, including Viktor Vekselberg's Foundation (The Link of Times), which purchased the Forbes Faberge collection and is regularly featured as an industry expert in prestigious media outlets, including CNBC, FOX Business, The Moscow Times,, USA Today, Bloomberg, SmartMoney, and The Real Deal.

Edward A. Mermelstein graduated from NYU, and is fluent in English and Russian. With offices in Moscow and Manhattan, his staff has the ability to speak 11 languages. For more information, please visit

SOURCE Edward Mermelstein
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Wednesday, August 17, 2011

The Malaysian Insider - Edward Mermelstein on US real estate, is the window closing?

US real estate window closing fast

August 17, 2011

Mermelstein said the continued interest in US real estate is probably because the US market is “consistently cited for its political and economic stability.” — Picture by Jack Ooi
KUALA LUMPUR, Aug 17 — A top international real estate lawyer says the window for Malaysian investors to get into the US real estate market is closing fast.

Edward Mermelstein, managing partner and co-founder of New York law firm Rheem Bell & Mermelstein told The Malaysian Insider that a window had opened one-and-a-half years ago for investors to buy real estate in key US cities such as New York, Washington DC and San Francisco and expect up to 20 per cent annual returns per year over a three-year investment horizon.

“Returns are starting to contract,” he said. “You don’t want to be the last one in. As the adage goes, you want to be the first one in and the first one out.”

The adage of being the first one in and the first one out holds true in the US real estate market currently, added Mermelstein. — Picture by Jack Ooi
Malaysian investors have typically overlooked the US market and preferred to invest in UK and Australian property. Notable exceptions have been the Genting group which invested in a New York racetrack last year and a 13.9-acre piece of land in Miami last month for US$236 million (RM703 million).

About half of Rheem Bell & Mermelstein’s business now comes from high net worth individuals and institutions overseas with increasing numbers from China, South Korea and Australia. This continued interest in US real estate is probably because the US market is “consistently cited for its political and economic stability.”

Mermelstein, who was in Kuala Lumpur recently to meet clients, has arranged an estimated 300 real estate deals for international buyers in the last two years.

But there are some things potential investors should take note of. He said it is difficult for foreigners to get a mortgage in the US and that they should be prepared to pay cash as well as seek advice on how to structure their investment to minimise tax expenses.

“The biggest mistake people make is not having proper representation, not just legal but also management teams and real estate brokers,” said Mermelstein.

The typical size of investment by the firm’s clients falsl in the US$3-5 million (RM9-15 million) range but is getting smaller as the number of investors from the middle-income range is growing.

Mermelstein said that properties which are favoured by investors currently are apartment complexes, offices and hotels.