The Real Deal New York

Billionaire backlash

From the Saudi crackdown to the Paradise Papers, how global political turmoil could blunt the flow of capital into NYC real estate
By E.B. Solomont and Will Parker | December 01, 2017 11:00AM

From top left, clockwise: Wu Xiaohui, Al-Waleed bin Talal,Mikhail Prokhorov and Lubna Olayan

It was just after 11 p.m. on Saturday, Nov. 4, when the well-heeled guests of the Ritz-Carlton Hotel in Riyadh, Saudi Arabia’s capital city, were roused from bed, marched outside and escorted onto buses parked in the hotel’s courtyard. With the resort emptied, roughly 30 Saudi officials and businessmen — including 11 members of the ruling royal family — filed in. Arrested at the behest of Crown Prince Mohammed bin Salman amid a wide-reaching anti-corruption purge, some have been held there ever since.

Among those reportedly sleeping on a thin mattress in the hotel’s ballroom is one of Saudi Arabia’s richest men, billionaire investor Prince Al-Waleed bin Talal, a part owner of the Plaza Hotel who also has stakes in a slew of other high-profile American companies.

More than any of the others, it was his arrest that reverberated across global financial markets, particularly after reports surfaced that bin Salman — the ambitious son of and newly named successor to King Salman bin Abdulaziz Al Saud — would seize some $300 billion in assets and repatriate that money to the Saudi economy.

But the roundup of the Saudi princes isn’t an isolated event.

It comes amid an unprecedented era of global political turmoil that’s put an unusually high number of global billionaires and high-net-worth individuals in the crosshairs and could have a chilling effect on real estate investment worldwide.

Over the past year, Chinese regulators have tightened their clampdown on foreign investment, detaining several of the country’s most prolific New York real estate buyers, including Anbang Insurance Group’s Wu Xiaohui and Fosun International’s Guo Guangchang. Meanwhile, the investigation into Russian interference with the U.S. presidential election has created more problems for wealthy Russians — already handcuffed by U.S. sanctions and a tanking economy — looking to invest in New York. And the latest in a string of massive news leaks provided a treasure trove of financial information exposing the uber-wealthy’s offshore banking habits, unmasking anonymous transactions and opening investors worldwide to increased scrutiny.

“I look at the events over the last 12 months and I say, ‘Now I’ve seen everything,’” said David Tobin, founder of real estate and debt brokerage Mission Capital. “So many things have converged over the last 12 months in terms of disclosure, disappearances, a crazy political environment, that it all has to be correlated.”

Tobin said deals have fallen off in New York, partly as a result.

“We can dance around it and sugarcoat it, but you have a reduction in transaction volume, and that has to do with economic and political turmoil around the world,” he said.

To be sure, not all billionaire investors are being squeezed. Russian tycoon Vladislav Doronin, for example, is actively developing in New York and Miami. In addition, there’s been a reshuffling of power players in hotbed areas, such as China and the Gulf region, as lesser-known investors rise in relevancy by aggressively trying to safeguard their capital.

“There is a global flight to quality every time there’s a major geopolitical event anywhere,” said Mark Zandi, chief economist for Moody’s Analytics. “Where you have a lot of capital bottled up, anytime people get the opportunity to get money out, they do.”

II: Drain the desert

In the real estate and business worlds, the attention from the so-called “anti-corruption” purge by the House of Saud — the royal ruling family — has landed squarely on bin Talal.

In addition to owning a 12.5 percent stake in the Plaza, the billionaire also owns slices of Citigroup, Lyft, Twitter and the Four Seasons hotel chain.

The investor reaction to his detainment was swift. Shares of his company, Kingdom Holdings, fell some 19 percent in the two weeks after he was detained, according to Reuters. And investors, especially inside Saudi Arabia, are nervous about continuing to support a company that the government has essentially come out against, sources say.

Hossein Askari, a business professor at George Washington University and a one-time adviser to a former Saudi minister of finance, said the crackdown was “not just to get rid of people who are threats” but also to address the country’s financial issues.

“If [bin Salman] can get $500 billion out of these guys … that would be very, very popular in Saudi Arabia, amongst the people,” he said.

The ramifications for real estate, while still not completely clear, have the potential to be big. For starters, they could blunt bin Talal’s ability to make further real estate investments.

Not only is the billionaire investor sequestered (albeit in a gilded hotel), but his assets are completely frozen, according to a source familiar with talks about the sale of the Plaza.

That could be a problem at the iconic hotel, which now resembles a real estate edition of the board game Risk, with the hotel’s majority owner — embattled Indian billionaire Subrata Roy — selling his stake.

But another billionaire from the Arabian Peninsula may see his hand strengthened by the Saudi crackdown. The former prime minister of Qatar, Sheikh Hamad bin Jassim bin Jaber Al Thani — widely known as HBJ — has bought the mortgage on the property, according to Bloomberg, which also revealed that he was the silent lender behind the minority purchase of the hotel by Ashkenazy Acquisition Corporation.

Buying the note on the Plaza could give HBJ a leg up on snagging the majority stake — or partnering with Ashkenazy to land it.

All of this comes as the decades-long tensions between Saudi Arabia and Qatar have flared up. In June, Saudi Arabia cut ties with its neighbor, accusing it of abetting Iranian influence in the Gulf and supporting terrorist organizations.

But it still remains to be seen how all of this will affect the countries’ common investments.

Zubair Iqbal — who retired from the International Monetary Fund in 2007 after 35 years — said the situation has not yet become problematic enough to change the strategies of sovereign wealth and other government-linked funds.

But that could change. “The whole situation in Saudi is very fresh,” said Colliers International’s Yoron Cohen, who represented the Saudi firm Olayan Group in its $1.4 billion purchase of the Sony Building at 550 Madison Avenue in 2016.

“It’s probably the beginning of new situations that may come up for the entire region, if it’s Qatar or Saudi, or Kuwait … [or] other foreign sovereign funds and investors coming,” Cohen said.
Since 2011, Middle Eastern nations have pumped $22 billion into U.S. real estate acquisitions, with about 6 percent of that coming from Saudi Arabia, according to Real Capital Analytics. But that number only captures a fraction of what’s really being invested — particularly from Saudi Arabia, where the money has largely come through hard-to-track investments in private equity and other pooled funds. This year, for example, Saudi’s Public Investment Fund committed $20 billion to an infrastructure fund being raised by private equity giant Blackstone Group.

Iqbal said the crackdown is likely to set off a surge in money flowing out of the Kingdom.

“There are [some] who may think [the government] will go after them. They could very well move their resources out of the country,” he said. “The system is quite free. You can do it and get away with it — at least in the short term.”

The Olayan Group — which is run by Lubna Olayan, an heiress of magnate Sulaiman Olayan — may already be feeling the effects of the Saudi shakedown.

The firm, curiously, postponed a pending IPO after the arrests. People familiar with the decision told Bloomberg that the delay was planned before the crackdown, but a representative of Olayan’s top U.S. executive declined to comment. 

Iqbal said that formidable families like the Olayans will have to leverage their connections under this new regime. “These powerful families have their benefactors in the [ruling royal family] itself,” he said. “If those benefactors remain in power and are on the right side of the crown prince, they don’t really have much to be [worried about].”

And the Olayan Group has a lot at stake on the real estate front.

While the Sony Building may be its highest-profile investment, it’s not its only New York City real estate play.

The company is also invested in a Related Companies fund and owns a 4.2 percent stake in Credit Suisse, an active New York real estate lender. The Financial Times reported last month that the Saudi government had been planning an investment of up to $1 billion in the bank, but that it’s now been postponed because of the crackdown.

Also potentially influencing the landscape for Gulf region billionaires is the Trump administration, which has an undoubtedly cozy relationship with the Saudis’ new ruling class. Trump has praised Salman’s self-styled anti-corruption campaign, and his son-in-law and senior adviser, Jared Kushner, visited the Kingdom just days before the arrests began. The Washington Post reported that Salman and Kushner were up until 4 a.m. on multiple evenings during Kushner’s stay — stoking speculation that the White House was told about the roundup in advance.

Meanwhile, Kushner also has a relationship with HBJ, who was reportedly considering a $500 million investment in 666 Fifth Avenue, the struggling crown jewel of the Kushner family real estate portfolio. But talks with HBJ reportedly fizzled in the first half of 2017.

III: Detained and derailed in China

In the last few months, several of China’s biggest billionaires have either mysteriously disappeared or been sidelined from making big New York City real estate investments.

Anbang, which shot to prominence in 2014 after paying nearly $2 billion to buy the Waldorf Astoria Hotel, is headed by one of them.

In late April, when Chinese regulators reportedly detained Wu, the company’s chairman, rumors ricocheted worldwide, casting a shadow on the company’s investment prospects. Two months later, Wu stepped aside for “personal reasons,” according to a company spokesperson.

But the insurance giant — which followed its Waldorf purchase with $30 billion in foreign investments — isn’t the only Chinese firm that’s been swept up in Beijing’s foreign investment clampdown. 

Since 2014, in an effort to stabilize the economy, China’s President, Xi Jingping, has reined in the foreign investment activity of a class of billionaires created under his predecessor.

“They made examples of a few people,” said Victor Shih, an associate professor of political economy at the University of California San Diego, referring to executives who were detained and ordered to curtail overseas purchases.

“The traditional real estate tycoons,” he added, “have learned their lessons.”

Hamad Bin Jassim Bin Jaber Al Thani and Wang Jianlin

Shortly after Wu’s arrest, banking regulators turned up the heat on Dalian Wanda Group, China’s largest commercial real estate firm, headed by billionaire Wang Jianlin. While Wanda denied that Wang was detained, several media outlets reported that he was taken into Chinese custody in August and barred from leaving the country.

Government officials also began investigating HNA Group and Fosun, which have both purchased trophy Manhattan buildings in the last few years.

In July, rumors circulated that Fosun’s CEO, Guo, who’s reportedly worth $9.3 billion, was missing. The company — which forked over $725 million in cash for the 2.1 million-square-foot office tower at 28 Liberty Street in 2013 — denied that he was detained.

So far, no reports have surfaced about HNA executives being locked up, but the scrutiny has all but ended a run that included $40 billion worth of deals since 2015, including the $2.21 billion May acquisition of 245 Park — the city’s priciest building sale of the year.

Late last month, HNA’s CEO, Adam Tan, said he was considering unloading holdings, Bloomberg reported. “If some sectors are now restricted by government, I will consider selling assets I bought in these sectors,” Tan said. “We will not invest in anything the government does not support.”

HNA’s buying spree also included a $6.5 billion deal last year to acquire a 25 percent stake in Hilton Worldwide Holdings from Blackstone, a partnership to buy 850 Third Avenue, two condos at One57 and the Wildenstein mansion, which it bought for a record $79.5 million this year.

It’s also an investor in Tishman Speyer’s Hudson Yards’ megatower known as the Spiral and in the Wheeler, a 10-story creative office project rising above Macy’s department store in Downtown Brooklyn.

Which of its high-profile New York investments it will now look to unload — in a market that is markedly down — is the question on many real estate minds.

While the Chinese crackdown is more economic than political, it’s resulting in a shakeup of the country’s growing class of billionaires in much the same way the Saudi detainments are.

The country currently has 647 billionaires, up from just over 250 five years ago, according to the Hurun Report, a Shanghai-based research firm. That’s in addition to 2,000-plus millionaires who are worth more than $300 million.
While this latest wave of detainments has intensified the situation, New York real estate players started feeling these capital controls a year ago. While foreign Chinese investment jumped 56 percent year over year to $28.2 billion in 2016, Morgan Stanley predicted that the government crackdown could result in an 84 percent drop in Chinese investment this year.

Earlier this year, for example, Wang — worth an estimated $25 billion, according to Forbes — abandoned his $1 billion bid to buy Dick Clark Productions.

“Policies have changed,” he told the Financial Times in a rare interview in April. “We do not want to become a company that does not abide by the rules.”

And last year, Anbang famously dropped its $14 billion bid for Starwood Hotels & Resorts Worldwide. The company also reportedly backed out of talks with Kushner to redevelop 666 Fifth. (A spokesperson for Kushner called the breakdown of talks “mutual.”)

And in July, Beijing reportedly instructed Anbang to sell its overseas assets and repatriate the earnings — a rumor company officials aggressively denied.

But while regulators have hamstrung many big players, the spigot hasn’t been turned off completely.  

(Click to enlarge)

“I’m seeing, firsthand, money coming out of China,” said Jay Neveloff, head of the real estate practice at Kramer Levin, who represented Anbang in the Waldorf deal. “I read that the outflow of investment funds has decreased, so I accept what I’m reading, but it hasn’t stopped.”

Chinese investors are still making residential purchases, too. But unlike in the past, when uber-wealthy players were making splashy buys — HNA co-founders and brothers Guoqing Chen and Feng Chen each paid roughly $47 million for separate condos at One57 in 2015, while hedge funder Guo Wengui plunked down $70 million for a co-op at the Sherry-Netherland — today’s investors are looking at lower-profile residential properties and financing their purchases.

“It’s rare to hear of a Chinese investor buying a $50 million, $100 million property,” said Daniel Chang of Sotheby’s International Realty. “They don’t want to be on the [government’s] radar screen.”

Chang — who said upper-middle-class investors are buying smaller apartments for themselves or their children — said that his Beijing contacts expect investment to pick up now that the Communist Party’s 19th Congress is in the rearview mirror. The weeklong October event outlines an economic and political course for the country.

During the congress, several up-and-coming politicians were also named to committee positions, setting the stage for a new balance of power.

“As the new elite [class] rises, there will be new billionaires created because they have ties with the political elite,” said Shih.

Others, meanwhile, are fighting back. Guo has accused Chinese government and business figures of corruption and is holed up in his Sherry-Netherland pad with plans to seek asylum.

“Nothing can stop me,” he told the Wall Street Journal. “The U.S. is the last land of justice.”

IV: Trouble in Paradise

On a Sunday night last month, Bono, the U2 frontman, accepted MTV Europe’s Global Icon award with his bandmates. He gave a brief a capella performance, which was met with ovations from the London audience.

But just a few days earlier, the International Consortium of Investigative Journalists, which collaborated with reporters from media outlets worldwide, revealed one of the globetrotting philanthropist’s less-publicized endeavors: his tax-avoidance maneuvering.

Tucked into an epic leak of 13.4 million financial documents that exposed the offshore tax-evasion practices of politicians, billionaires, celebrities and blue-chip companies were details about a company Bono invested in called Nude Estates, which owned a stake in a shopping mall in eastern Lithuania, a country the Grammy Award- winning artist has reportedly never visited. And because his company was based in the Mediterranean archipelago of Malta, Bono would owe just 5 percent tax on profits versus Lithuania’s 15 percent corporate tax rate. The shopping mall investment was eventually transferred to an entity in Guernsey, an island in the English Channel, which has zero taxes on corporate profits.

But Bono’s tax exploits were just one of many exposed in the Paradise Papers — nicknamed for idyllic Bermuda locale of the law firm Appleby, which specializes in offshore dealings and which had a batch of high-profile clients exposed.

Along with the Panama Papers in 2015 and the Offshore Leaks in 2013, this leak — which Appleby claims was a hack — brings the world of real estate and finance into a new age of transparency. As global real estate investment has skyrocketed over the last decade, so has the use of offshore entities, which enable investors to evade taxes and stay anonymous. Global offshore wealth now amounts to at least $21 trillion, according to the U.K.-based Tax Justice Network. 

But as leaks pile up so, too, does the prospect of losing anonymity, which could dissuade investors from future deals.

In addition to Bono, the Paradise Papers have also ensnared Apple’s billionaire CEO Tim Cook; Trump’s billionaire Commerce Secretary Wilbur Ross; and Blackstone, helmed by billionaire  Stephen Schwarzman, among many others.

“We all know what’s going on in tax havens and how they’re being used — legal, illegal, there are all kinds of stories mashed together in this leak,” said Omri Marian, a tax attorney and law professor at the University of California at Irvine.

The lengths to which Apple shopped the globe to plant its flag in a location with the lowest imaginable tax liability was particularly revealing. The tech giant reportedly avoided paying $128 billion in U.S. taxes.

Meanwhile, Blackstone reportedly used companies in Luxembourg and the English Channel island of Jersey — both notorious tax havens that are expected to adopt new European Union tax evasion regulations — to execute a series of complicated financial maneuvers, such as interest-deductible intercompany loans in connection with its roughly $250 million purchase of St. Enoch, a retail complex in Glasgow, and a nearly $640 million buy of Chiswick Park, a London office complex, according to a report in the Paradise Papers.

While there was nothing illegal about those deals, new EU rules, which are scheduled to be adopted by member states by 2020, would outlaw the precise tax structure Blackstone used, said Reuven Avi-Yonah, a tax professor at the University of Michigan who reviewed the Blackstone documents.

A Blackstone spokesperson said tax structures were “acquired from institutional investors and are of a type commonly used for decades for investments in U.K. real estate.”

“Blackstone’s investments are wholly compliant with U.K. and international tax laws and regulations,” he said.

Nonetheless, the Paradise Papers disclosure provided valuable intel into how the private equity giant pencils out real estate profits, at least partly by avoiding statutory tax rates.

This heightened state of transparency is already having policy consequences as political will to regulate offshore entities mounts in both the U.S. and abroad.

“If I were evading taxes, I would really worry,” Avi-Yonah said. “There is no such thing as a foolproof cybersecurity mechanism.”

But Mission Capital’s Tobin said the disclosure would not turn off potential Blackstone investors in the slightest.

“I absolutely want Blackstone to minimize the taxes it pays,” he said. “And I am going to reward that as opposed to trying to withhold funding.”

Although the tax reform legislation being floated in Congress is largely aimed at lowering taxes for U.S. corporations, the Senate version also includes a 30 percent limit on deductible interest from offshore income and a one-time 10 percent tax on all cash held overseas. The proposal, however, includes a transition to a so-called “territorial tax system,” which would make it easier for U.S. companies to operate abroad without owing income tax at home.

But Avi-Yonah said the government is currently losing tens of billions annually from offshore tax structuring.

While a Blackstone-level firm may not be dissuaded from using offshore structures because of a risk of leaks, smaller developers who tap private equity funds to finance deals or limited partners who invest their money in funds based offshore might feel more vulnerable, Marian said.

“It takes away the private in private equity, in a sense,” he said.

V: Russia’s revolt

For Russia, the backlash against billionaires started back in 2014 when the U.S. imposed sanctions on it for annexing Crimea from the Ukraine. Seemingly overnight, NYC residential brokers reported that high-rolling clients stopped calling and the Russian buyer pool dried up.

But today there’s a new wave of Russian backlash that has the potential to further hamper the already delicate relationship between Russian billionaires and New York real estate.

That’s largely because any possible thaw in U.S.-Russian relations has been quashed by special investor Robert Mueller’s probe of the Trump campaign and allegations that it coordinated with Russia to influence the presidential election.

At the center of the investigation is former Trump campaign manager Paul Manafort, who allegedly collected $60 million over a decade from Oleg Deripaska, a Russian oligarch with close Kremlin ties who was allegedly offered “private briefings” about the campaign.

Within a year of working for Deripaska — whose net worth is pegged by Forbes at $5.2 billion — Manafort began snapping up real estate in New York, Florida and Virginia, amassing a $15 million portfolio that included a condo on Baxter Street in Chinatown ($2.5 million), an apartment on Howard Street in Soho ($2.9 million) and a Brooklyn brownstone in Carroll Gardens ($2.9 million).

Manafort is now facing federal charges for allegedly laundering millions of dollars through real estate and other luxury items as prosecutors pick over his ties with Russian officials.

And while his case is clearly extreme, the current Russia-obsessed landscape has meant a new level of scrutiny for everyone.

One of the players who may be feeling the heat is Mikhail Prokhorov, the oligarch-turned-politician who ran against Vladimir Putin in Russia’s 2012 presidential election — a move pundits say was a deliberately failed attempt to legitimize Putin’s victory.

Until recently, Prokhorov, who owns the Barclays Center and the Brooklyn Nets, managed to evade Putin’s ire.

“Prokhorov has always stayed within the boundaries,” Gleb Pavlovsky, a former Kremlin adviser, told Bloomberg in 2016. “But uncertainty is rising and that’s not Prokhorov’s element.”

The 52-year-old, who is worth $8.9 billion, according to Forbes, made his fortune with the nickel company Norilsk in the 1990s when Russia was privatizing state-owned industries. In 2007, he was forced to sell his Norilsk stake after being arrested in France (though never charged) for allegedly flying in prostitutes from Moscow. He walked away from the sale $10 billion richer.

But the six-foot-eight billionaire remained mostly anonymous stateside until his 2009 purchase of the Nets, paying $200 million for an 80 percent stake in the team and a 45 percent stake in the Barclays Center. At a news conference that spring, he quipped: “America, I come in peace.”
Six years on, Prokhorov increased his bet on New York, taking over the leases on Brooklyn’s Paramount Theatre and the Nassau Coliseum. (Bloomberg valued the leases at $2.2 billion.)

Despite the New York ties, Prokhorov’s official residence remains in Siberia, though he lives in a palatial 21,500-square-foot “bachelor pad” north of Moscow where he’s said to work out for two hours daily in a private gym. Prokhorov reportedly stays in the Four Seasons when he’s in New York.

Prokhorov’s relationship with the Kremlin began to unravel last year, after his media company RBC identified the Putin cronies named in the Panama Papers.

Russian federal agents subsequently raided Prokhorov’s Moscow offices, sending a “clear warning to other oligarchs to stop capital flight,” Tim Ash, a London-based analyst who was working at Japanese investment bank Nomura, told Reuters at the time.

Not long after, Prokhorov sold his stake in a $2 billion Russian fertilizer company and put his $900 million stake in aluminum giant Rusal on the market. Seven months after the raid, Prokhorov also began shopping a 49 percent stake in Nets.

Despite the curious timing, Prokhorov’s camp insisted it’s not liquidating. “No such decision has been made,” Dmitry Razumov, CEO of Prokhorov’s Onexim holding company, said in a statement last year. “Our assets are constantly in a state of transition.”

And for the Nets, sources said Prokhorov likely wanted to cash in on his investment after NBA teams skyrocketed in value after a lucrative 2016 TV deal. This past October, that theory gained steam when Joseph Tsai, co-founder of Chinese e-commerce site Alibaba, agreed to buy the Nets in a deal that valued the team at a record $2.3 billion, up from the $875 million it was worth when Prokhorov picked it up.

Still, the current climate raises questions about whether Prokhorov will look to make other splashy purchases anytime soon.

For the most part, investors of his caliber are avoiding the limelight.

“The Russians went home a while ago,” said Scott Latham, co-head of Colliers’ New York capital markets group. “When the petrol dollars dried up in Russia, Putin was pushing most of the high-net-worth Russians to get as much of their capital back as he could.”

But by that time, some wealthy investors had already moved significant assets overseas, including Putin ally Roman Abramovich and Doronin.

“These are some that either saw it coming, or didn’t, but they were already here,” said Douglas Elliman’s Jacky Teplitzky, who has worked with Russian buyers.

In New York, Doronin teamed up with broker-turned-developer Michael Shvo to buy the upper portion of the Crown Building for $475 million in 2015. He’s currently converting the top floors of the building into an Aman-branded hotel and 20 luxury condos. The five-story penthouse will reportedly be priced at more than $100 million. He’s also building a 57-story, 249-unit tower dubbed Missoni Baia in Miami and has said he plans to invest $1 billion overall in that city.

“I think it’s good; not many people right now are developing,” Doronin told The Real Deal in October, speaking about forging ahead with the Miami project amid a condo slowdown.

Doronin aside, Russian sanctions have made U.S. and European banks “wary of touching” certain deals, said Jacob Kirkegaard, a senior fellow at Washington D.C.-based Peterson Institute for International Economics. Banks that get involved with bad actors, he said, “run the risk of being slapped with very, very large fines, which is a significant financial risk, as well as a reputational one.”

Sliding oil prices and the falling ruble have further hobbled prospects for overseas investment from Russian billionaires. “Now it’s at a point where there’s not much money that can leave the country, between sanctions and the price of commodities dropping,” said New York attorney Ed Mermelstein, who is Russian-American.

Until the 2014 sanctions were imposed, Russian money was flowing into New York and U.S. real estate with abandon. Between 2008 and 2012, Russian buyers bought more than $1 billion worth of residential real estate in the U.S.

But when it ended, it wasn’t pretty. “A lot of Russian companies and banks — and some prominent investors — got blacklisted, so it had a domino effect,” said Petro Zinkovetsky, a New York attorney who works with many Russian clients.

And while the Trump presidency initially brought the prospect of a new era of diplomacy between the U.S. and Russia, that was short-lived. 

In October, Mayor Bill de Blasio told BuzzFeed News  he sees Russian investment in New York real estate as a “problem.”

“It manifests here as people with a lot of ill-gotten gains buying a lot of property — I don’t like it one bit,” he said. “I wish I had a specific law or approach to address it.”
Attorney Marlen Kruzhkov said the mayor’s comment stoked fears among Russian buyers.

“I’ve had clients of mine saying, ‘I don’t know if I want to invest — not just in real estate, but in general — what if they seize my assets later?’” he said. “I don’t think it’s a rational fear, but it’s there.”