The Russians are coming! And they’re bringing wads of cash to buy property and transform neighborhoods throughout the city.
Forget the huddled masses that left the former Soviet Union and turned Brighton Beach into Little Odessa beginning in the late 1970s. The new breed includes this group’s offspring, who have vaulted into the upper middleclass, along with scions of Russia’s nouveau riche, eager to bask in the glamorous life.
Aluminum heiress Anna Anisimova, 20, represents the young and the wealthy. She attracted considerable attention when she paid the highest price ever for a summer rental in the Hamptons two years in a row, which now stands at $650,000. She also bought Diane von Furstenberg’s townhouse on West 12th Street in Manhattan for $23 million last year. Now attending New York University, she plans to build a real estate empire by building on the considerable bulk of her family’s Coalco company.
Most Russian buyers in Manhattan favor condos on the staid Upper East and Upper West sides, though many of them downplay their heritage and consider themselves to be Americans, said high-end broker Elizabeth Stribling.
Though the Russian real estate rush is nothing like what she’s seen in the French Riviera and London, which is also a major draw for Russian tycoons, “We have made some major transactions with some very wealthy people of Russian extraction, who have gone to college here or gotten MBA’s here,” she said. “But we haven’t dealt with hordes of Russians.”
The prevalence of co-ops in Manhattan restricts the ability of Russians and Europeans to penetrate the market en masse. “People whose money is based elsewhere have a lot harder time getting into a co-op than a condo,” she said.
The outer boroughs are feeling the Russian influence more than Manhattan. Bukharan Jews from the former Soviet Union’s Central Asian republics have been settling in Rego Park, Queens, since the early 1990s, but other Russians flush with cash are flooding into Forest Hills north of Queens Boulevard, where large lots, favorable zoning, and an aging population intent on taking advantage of ballooning prices combine to create a fertile market.
Many buyers are paying up to $1 million in cash to demolish homes constructed in the 1920s and put up outsized brick houses, said Karen Eng, manager of Century 21 Benjamin in Forest Hills.
“In the last two or three years, it’s been like, boom, and prices have jumped so quickly,” she said.
Many of the newcomers are Jewish, and favor the proximity to synagogues along with the large lots. The telltale signs of a Russian-owned house include walled-off lots and paved-over front yards.
“In Russia, wealthy people have fences and walls; it gives you prestige,” said Eng. “Americans like to see green and openness, but when a Russian family moves in, the first thing they do is build a wall and put in metal railings, even when they buy attached houses. They also build to the edge of the lot.”
Elsewhere in Queens, Jamaica Estates, Donald Trump’s boyhood stomping ground, is also changing as Russians move in and make architectural alterations to solidly constructed 1920s homes. Partial to waterfront property, Russians are also helping to spur development in the Rockaways, where massive apartment complexes are sprouting in lots that have been empty for decades.
In Staten Island, new developments catering to Russians are feeding a building boom on the South Shore. Favored neighborhoods include Eltingville and Huguenot.
No borough has been more transformed by the Russian presence than Brooklyn, where they are radiating from their traditional stronghold in Brighton Beach and their aesthetic has also clashed with longstanding locals.
“It’s a whole new world,” said Arthur Kessler, a 30-year real estate veteran in Brighton Beach. “Over the next 10 years, you can say ‘hasta la vista’ to any house built before 2000. This will look like Florida, even in Manhattan Beach, with its small zoning lots.”
Like in Queens, the McMansion syndrome has generated “a lot of resentment,” said Kessler. Change is also afoot in formerly Italian strongholds like Bensonhurst, Bay Ridge, and Sheepshead Bay, where Russians are buying in cash and pumping up real estate values. New condominiums lining Emmons Avenue typify the Russian influence on the borough’s landscape.
“Years ago, I told everyone to put money into Brighton Beach and just sit back,” he said. “When they built the Oceana condominiums, they advertised one of the penthouses at $1.2 million and everyone thought they were crazy. You know what they got after they completed it? $3 million! And this is Brooklyn, not the Upper East Side of Manhattan.”
Like many brokers in southern Brooklyn, Kessler has added Russian-speaking staff.
“I’m the only American broker left,” he said. “They’re no different than people from all the other countries that have come to America. They found that the streets are made of gold and that they have the freedom to do what they wish.”