When the global financial crisis hit, New York City property was said to be "bulletproof". But prices began dipping and then plummeting, leaving the city with hundreds of stalled projects.
Fact box: Gulf bites of the Big Apple: Major New York property transactions by Gulf organisations.
2011 // 750 Seventh Ave Fosterlane Management Corporation, an arm of the Kuwait Investment Authority, signs a contract to pay US$485 million (Dh1.78 billion) for the former Morgan Stanley headquarters. The deal is one of the biggest in New York and the largest investment in the city's property sector since 2008.
2009 // 157 57th Street Aabar, an investment company owned by the Abu Dhabi Government, discloses for the first time that it is backing an ambitious tower near Radio City Music Hall from the developer Extell.
2008 // Chrysler Building Abu Dhabi Investment Council swooped in with one of the biggest deals of 2008, paying $800m for a 75 per cent stake in the building and surrounding property.
2008 // General Motors Building Boston Properties teamed up with the Dubai government private equity fund Meraas Capital to buy the General Motors building for $2.8bn.
2005-2007 // Manhatten (various) Istithmar World, the private equity arm of Dubai World, went on a buying spree in Manhattan starting with 230 Park Avenue for $705m. The biggest acquisition was 280 Park Avenue for $1.2bn. Both those deals were profitable.
Investors were stuck with investments made at the peak of the market. Now, nearly three years since the fall of Lehman Brothers in September 2008, Gulf investors are quietly returning to the Big Apple.
The former Morgan Stanley building at 750 Seventh Avenue in Manhattan was sold this month for US$485 million (Dh1.78 billion) to Fosterlane Management Corporation, an arm of the Kuwait Investment Authority.
The acquisition comes after Fosterlane sold most of its New York City portfolio between 2004 and 2007.
It once owned the Lipstick Building at 885 Third Avenue, where the disgraced Bernie Madoff had his offices before his downfall. The 34-story tower, built in 1989, was sold by the US property company Hines.
Just blocks away from 750 Seventh Avenue is the Carnegie 57, at 157 West 57th Street, which is billed to become the tallest residential building in New York City.
It is being developed by Extell, a US property company, but the project was made possible by funding from Abu Dhabi's Aabar.
The project is an ambitious one for Extell and Aabar. At a time when few major projects are under construction and the economy is still struggling to grow, the companies are pushing ahead with an ultra luxury project.
The 1,005-foot tower, located one street away from Central Park, was designed by the French architect Christian de Portzamparc and will have 136 premium apartments on the top 52 floors.
It will give views that stretch the length of the park. The lower part of the building will be a five-star Park Hyatt Hotel. The project's total price tag is $1.3bn, and completion is expected in 2013.
"If you can raise the money, now is the time to begin investing in New York," Gary Barnett, the chief executive of Extell, said last year. "There is a realisation from the Middle East that this is an opportune time to invest."
Aabar paid for three quarters of the initial financing of the project, giving it a significant equity stake.
The signs point to an increasingly positive view on New York property by foreign investors.
Purchases of US commercial properties by foreign investors accounted for $10.1bn of transactions over the past year, according to Real Capital Analytics, a research company. Of this, $3.3bn was spent in New York City.
"It's definitely picking up," says Dan Fasulo, the managing director of Real Capital Analytics. "Many foreign investors have been bidding."
In fact, if there was a map of New York with each country's ownerships identified, it would be a multicoloured display with sovereign wealth funds from the Middle East, private families from Russia and Brazil, as well as major pension funds from abroad all owning different properties.
Data for New York suggests prices are stabilising near the bottom. The average price of apartments and co-operatives on the island of Manhattan was $1,025 per square foot, up from the lowest point in the third quarter of 2009 when prices sank to $996 per sq ft, according to the appraisal company Miller Samuel. The peak was in the second quarter of 2008 when prices rose as high as $1,322 per sq ft.
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Last Updated: May 17, 2011
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Gulf countries have traditionally been best known for their trophy purchases in New York and other commercial capitals of the world.
Three years ago, the Abu Dhabi Investment Councilbought a 75 per cent stake in the Chrysler Building, one of the best-known skyscrapers on New York's skyline, for $800m. The deal garnered headlines for Abu Dhabi across the world, but analysts say it is unlikely to be a lucrative investment, considering the price the fund paid and the timing of the deal.
Istithmar World, the private-equity arm of the Dubai World conglomerate, went on a New York City buying spree during the first decade of the century.
Some of the deals turned a major profit, but some that the company held on to through the financial crisis suffered major losses. The W Hotel, for $282m, was sold for a mere $2m.
The company still has several investments in New York property, including a stake in the Mandarin Oriental hotel near Columbus Circle.