Coming to America New luxury developments in the United States appeal to Asian investors looking for serviced comfort in some of the world s best known downtown enclaves. by JULES KAY 30
MILLENNIUM PLACE BOSTON The last two years have seen considerable international speculation into US real estate markets. After the sub-prime crisis, opportunistic agents were quick to take advantage of foreclosures and offer distressed properties to bargain hunters from abroad looking either to lease them out or simply hold on to a portfolio of US real estate assets while they waited for what market analysts continue to pitch as an inevitable rebound. Since then, investment has diversified and a recent report from the US National Association of Realtors indicated that in the 12 months from Q2,2011 to Q2,2012, international buyers accounted for US$82.5 billion of the US$928 billion invested into residential property, or around 9 percent, an increase of US$16 billion on the previous one-year period. In terms of nationalities, the most active foreign players in US property markets include Canadians and UK buyers, while investors from China and India also represent a significant force. Asia has become a particular target for US developers in recent months, and it is not only the distressed end of the property market that is drawing interest from this region. As property prices continue to stagnate, and with the US dollar still weak against many other world currencies, luxury property has become an attractive investment opportunity for foreign investors looking to purchase secure investments in some of the world s most famous and appealing, upscale neighbourhoods. The USA has a broad and deep Asian community and network across the country, making it one of the easiest place to settle and live in, compared with other international markets like UK or Australia, said Richard Baumert, partner at Millennium Partners, which is holding a series of promotional events in Beijing, Shanghai and Taipei to kick off the global launch of its latest residential development, Millennium Place Boston. The US also offers world class secondary and tertiary education opportunities, and given Asians focus on education this offers a great pull factor for Asians planning to send their children to study. 31
32 Looking for a New England Millennium Place is the first residential property of its kind in Boston, located on Avery Street in Boston s prominent Beacon Hill neighbourhood, one of the city s most vibrant, historic areas and alive with culture and entertainment. Designed by acclaimed architect Blake Middleton of Handel Architects, the 175-foot, 15-story Millennium Place comprises a total of 256 luxury residences, including 1-bedroom, 2-bedroom, and 3-bedroom units, ranging in size from approximately 775 to 2,360 square feet. Fourteen penthouse residences, a combination of 2-bedroom and 3-bedroom units, feature private terraces. Residences range in price from US$550,000 to US$2.8 million and Millennium Place is also close to Boston s many prestigious educational institutions, including Harvard University, Massachusetts Institute of Technology, and Boston University. For investors, Boston is an attractive market, given its limited supply, good value and hence good appreciation potential, says Richard Baumert. It s a fundamentally strong and stable market with high rental value and for end users, who will be primarily families with children going to school in Boston or with businesses in Boston, as there is a fairly large Asian community. Convenience is a major draw for international buyers at Millennium Place, the property will be fully managed by Millennium Partners, and will come with a 24-hour private resident concierge, access to an on-site fitness and wellness centre with Pilates and yoga studios, as well as a direct link to the extensive programmes offered by Sports Club, LA Boston, which is conveniently located right across the street. The management MILLENNIUM PLACE company will also offer assistance with leasing owners apartments and as as a leading transformative developer of unique mixed-use residential and commercial properties, Millennium Partners comes with a solid track record of success, with projects that include New York s Central Park South and Lincoln Square, The Ritz-Carlton Hotel & Residences in New York and Washington D.C., and Four Seasons in San Francisco and Miami. This project offers investors say access to excellent educational institutions, good value in terms of hardware and software for the best residential development in the city, added Baumert. Boston has always been one of the better performing markets in the US and has a lot to offer Asian buyers given its fundamentally stable and strong economy driven primarily by its health and education industries. There is also limited supply and lots of job opportunities being created here.
New York, New York Another developer actively targeting the Asian market is The Moinian Group, which owns and operates a property portfolio in excess of 20 million sq ft of assets valued at nearly US$10 billion, making it one of few national real estate entities in the US to develop, own and operate properties across every asset category, including office, hotel, retail, condos and rental apartments. The Moinan Group recently launched W New York Downtown in New York City s rapidly revitalising financial district, Lower Manhattan, located across form the 9/11 Museum and Memorial Park. The 58-storey, glass clad tower was designed by Gwathmey Siegel & Associates and also features a striking private residential lobby conceived by Rockwell Group, the renowned New York-based architecture and design firm, as well as the new outdoor Gwathmey Plaza, a landscaped outdoor plaza named in honour of the building s architect and open for residents and locals. The Moinian Group also consulted with Hong Kong-based fung shui master, Alfred Cheng, for the exterior design. New York City penetrates all types of foreign investors looking for stable opportunities, said Joseph Moinan of the Moinian Group. Asian banking institutions are lending more money to borrowers due to the abundance in cash and expansion eagerness in such markets. Cash build up and low mortgage rates in some Asian markets make the W Residences a great purchase located in the heart of major revitalising efforts, and an influx of billions of dollars into the Financial District to make this happen. The Residences at W New York Downtown comprises 223 contemporary designed residences on floors 23 56 offering sweeping views of the city skyline and waterfront. The Residences include furnished and unfurnished studio, one-bedroom and two-bedroom condominiums with full access to W Hotels signature WHATEVER/WHENEVER services and amenities, including 24 hour room service from BLT Bar&Grill. Residents also enjoy exclusive access to a 31st Floor Residential Living Room with digital entertainment, MET lounge, a hightech Kinesis fitness centre, spa treatment rooms with sauna and a 58th floor rooftop terrace with 360 degree views of the Big Apple. Owners have the option to lease out their property for 6 months or more and a 421-A Tax Abatement package offers property tax relief for 10 years. Apartment prices range from US$1.3 million to US$3 million, and pricing for penthouse floors is available upon request. Select, fully furnished residences conceived by Louise Sunshine are also available and blend custom furniture, antiques and art pieces. The W Residences has the highest yield return on rentals due to international demand from corporate relocations, banks, and executives, added Moinan. [Asian] currencies to the dollar are also a major advantage in terms of price point, rental rates, and the resale value. The surrounding activity continues to bring in high demand and major investment funds. The rental market shows rates between U$4,500 - U$11,000 per month, based on market variables. An in-house team assures quality control for all owners. For any sales and property management services, foreign investors can consult with The Nassimi Group, an affiliate of the residential sales giant, The Corcoran Group. 33 SUNSHINE SELECT RESIDENCES AT W NEW YORK- DOWNTOWN
34 Leading Las Vegas Conceived by internationally renowned architect Helmut Jahn, who also designed Bangkok s Suvarnabhumi Airport, Veer Towers is another new US architectural landmark that is catching the attention of luxury investors from Asia, this one in Las Vegas. Veer Towers features studios, deluxe studios, one-, two- and three-bedroom apartments and penthouses, while The Residences at Mandarin Oriental feature two distinct living collections: The Luxury Collection and The Penthouse Collection, the latter encompassing the top six floors of the building and delivered as an open canvas for residents to create their own personal sanctuary. The residences are supported by major retail and entertainment projects, which draw together the work of no less than eight internationally acclaimed architectural firms including Pelli Clarke Pelli, Kohn Pedersen Fox, Helmut Jahn, RV Architecture LLC led by Rafael Viñoly, Foster + Partners, Studio Daniel Libeskind, David Rockwell and Rockwell Group, and Gensler. Las Vegas attracts around 40 million visitors per year, and 20 percent of them are from overseas, said Tony Dennis, executive vice president of project developer CityCenter s residential division. With places like Macau and Singapore emerging in the last 5 years, the city has to re-invent itself and work harder, but it is still an iconic destination that can hold its own. VEER TOWERS US Investment Framework acquisition or ownership of real property by a foreign person tax is imposed on all fixed, determinable, annual, or periodical (FDAP) income generated by property in the US (which includes rental income) connected with the conduct of a US trade or business, then it is subject to regular income tax rates on a net basis (from 15-35 percent) the sale of capital assets unless effectively connected with trade or business. If all tax is fully withheld at the source, then no income tax return is required