No more secrets in luxury real estate: US to regulate use of LLCs in Manhattan, Miami

Program would monitor transactions and identify buyers

New York /
Jan.January 13, 2016 11:55 AM

All-cash purchases of luxury apartments by anonymous shell companies, increasingly common in high-end real estate deals, may soon be a thing of the past.

The U.S. Treasury Department is rolling out a program in New York and Miami to monitor those transactions and identify buyers, starting in New York and Miami, the New York Times reported.

“We are concerned about the possibility that dirty money is being put into luxury real estate,” the Treasury’s Jennifer Shasky Calvery told the newspaper. “We think some of the bigger risk is around the least transparent transactions.”

In transactions above $3 million, the government will require title insurance companies to discover buyers’ names and submit the information to a database that Treasury will make available to law enforcement.

In Manhattan, 1,045 apartments were sold above that price level in the second half of 2015, worth about $6.5 billion in total, according to data from PropertyShark.

It will be the first time the federal government has required this sort of disclosure in real estate transactions, though the city launched its own attempted to lift the “veil of secrecy” around luxury real estate buys earlier this year.

The program will run on a trial basis from March through August of this year. It will become permanent nationwide if officials discover sufficient evidence of money laundering in the data.

Just last week, an entity called LLC, 432 PARKVIEW became the first buyer at Harry Macklowe’s 432 Park Avenue in Midtown. It bought a three-bedroom, 4,000-square-foot unit for $18.1 million. [NYT]Ariel Stulberg

Correction: A previous version of this article said that 1,045 Manhattan apartments above $3 million were sold in 2015. That was actually the number sold in the second half of 2015. 


Related Articles

arrow_forward_ios
Here are the week’s top luxury sales
Here are the week’s top luxury sales
Here are the week’s top luxury sales
Clockwise from left: John D. Rockefeller, Izzy Englander, Steven Mnuchin, David Koch, Jacqueline Bouvier, and William Zeckendorf (Credit: Getty Images and StreetEasy)
For 15 years, David Koch lived at the world’s “richest building”
For 15 years, David Koch lived at the world’s “richest building”
Here are the week’s top luxury sales
Here are the week’s top luxury sales
Here are the week’s top luxury sales
Extell president Gary Barnett, 510 East 14th Street and RXR Realty CEO Scott Rechler (Getty, EVGB)
Extell sells stake in Manhattan rentals to RXR Realty
Extell sells stake in Manhattan rentals to RXR Realty
Cyrus Vance (Getty, iStock/Illustration by Alexis Manrodt for The Real Deal)
Prosecutor pushes for more LLC transparency
Prosecutor pushes for more LLC transparency
A two floor unit in The Benson on Madison Ave was the priciest home to go into contract last week. (The Benson)
Best week since 2019 for Manhattan luxury market
Best week since 2019 for Manhattan luxury market
(iStock/Photo Illustration by Kevin Rebong for The Real Deal)
Signed contracts spike in Manhattan and Brooklyn in January
Signed contracts spike in Manhattan and Brooklyn in January
Meredith Bluhm-Wolf and 520 Park Ave. (Getty, 520 Park)
Daughter of casino magnate Neil Bluhm buys $20M condo
Daughter of casino magnate Neil Bluhm buys $20M condo
arrow_forward_ios

The Deal's newsletters give you the latest scoops, fresh headlines, marketing data, and things to know within the industry.

Loading...