Deferred demand sends Russians on New York spending spree

Edward Mermelstein, an attorney and managing partner with Rheem Bell & Mermelstein, and the Russian flag

Russian magnates
are spending massive amounts of money on residential real estate in the New York area, in Manhattan and some parts of Long Island, according to Edward Mermelstein, an attorney and managing partner with Rheem Bell & Mermelstein, who told Moscow-based website Russia Beyond the Headlines that half of his company’s current deals involve clients from Russia and the Ukraine, an enormous increase in the last few months.

“I rarely see Russians buying property for less than $800,000 to 900,000,” Mermelstein said.

As The Real Deal previously reported, one of the most important things for Russian buyers is a desirable location.

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“Russians usually buy real estate in the best buildings in prime locations, focusing on Park Avenue, Central Park West, Central Park South, Fifth Avenue and 57th Street,” said Victoria Logvinsky, a vice president at Prudential Douglas Elliman. “You often hear a Russian client asking where the best buildings and best apartments are.”

One reason for recent the increased interest is “deferred demand,” she added, in which clients move forward with transactions they put on hold during the 2008 market crash. With the dollar is weakening against their local currencies, Russian buyers are also able to afford apartments they couldn’t in the past.

As previously reported, Russian composer Igor Krutoy caused a stir earlier this year by purchasing a $48 million condominium unit only six months after buying in Southampton for $12.85 million.