Foreign diplomats struggle to find foothold in NYC real estate

Concerns about diplomatic immunity, large security details and parties leave co-op boards wary

TRD New York /
Sep.September 19, 2014 02:15 PM

In housing markets the world over, members of the diplomatic corps generally enjoy easy access to and quick approval at posh properties. But such is not always the case in Gotham, where foreign emissaries often find themselves struggling against co-op boards and other vetting groups disinclined to deal with tenants who have diplomatic immunity, large security details and busy entertaining schedules.

Back in July, the French ambassador to the U.S. was rebuffed following a $7.8 million bid to purchase a 14-room duplex unit at River House from department store heir Bruce Farkas’ ex-wife Arlene Farkas.

“It is not in the interest of the residents … to cohabit with foreign emissaries who are, to a large extent, beyond the reach of the law,” resident Elizabeth Kabler wrote in a letter to River House shareholders at the time.

The move came as a surprise to a number of seasoned brokers, the New York Observer reported, as some countries — such as France — tend to enjoy easier access to the city’s tight housing market than others.

“Putting aside the diplomatic complexities of ownership, countries that are considered prestigious by Americans — those that are stable democracies or constitutional monarchies — add cachet and even the most rigorous co-ops have allowed them in,” Meredyth Smith, a broker with Sotheby’s International Realty, told the Observer. “For example, England had an apartment at 834 Fifth Avenue, and 10 Gracie Square for a long time housed New Zealand. So for some countries, the gates are open.”

Others, however, get a chilly reception right from the start. Even some condominium buildings have been known to go to extreme lengths to bar diplomats from their premises.

And while diplomatic immunity doesn’t apply to real estate deals for countries who signed the Geneva convention, the legitimacy of such wavers is debated and can lead to legal tangles. Unrest at home can also cause upheaval abroad, as is the case with a 14-room duplex at 730 Park Avenue purchased by Yugoslavia in 1975, which has sat empty since war broke out in the Balkans in the early 90s. [NYO]Julie Strickland

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