Selling real estate to diplomats is a good business on the East Side. With their tax exemptions, missions and embassies can afford to buy much larger spaces than they could ever rent. If, that is, you’re willing to put up with the bureaucracy and layers of red tape that come with selling property to sovereign nations.
Rusty Thrasher, who runs a small brokerage specializing in Murray Hill apartments, learned that the hard way, when a deal to sell a 3,237-square-foot condo combo at Manhattan Place at 630 First Avenue to Bangladesh’s permanent representative to the United Nations A.K. Abdul Momen (“with concurrent accreditation to the Republic of Chile and the Republic of Peru,” because why not?) almost fell through.
“It was very complicated, exciting, emotional and crazy all at the same time,” Mr. Thrasher told The Observer. “The mission was paying a lot of money”—and, at least indirectly through their landlord, taxes—”to have the ambassador rent. When he started looking again to get out of his lease, one of the guys at the mission said, ‘Why don’t you buy a place?’ “
Meanwhile, the husband of Mr. Thrasher’s client, Treese Kurtzer, had just passed away, and she was looking to move with her three kids out of their apartment at Manhattan Place. Ms. Kurtzer had originally decided to go with an all-cash offer for $3.2 million, while the Bangladeshi mission was dillydallying around (“seventeen different people had to sign off on everything,” Mr. Thrasher said).
But when that offer fell through (the family, who was living in Stuy Town, decided at the last minute that they didn’t want to move that far uptown), Mr. Thrasher returned to the Bangladeshis and offered them the apartment at their higher $3.25 million bid. After weeks of hashing out the terms with attorneys, Mr. Thrasher thought he’d finally worked it all out—until the Friday before they were scheduled to close on the unit.
“We finally get a call that says the mission cannot buy the apartment, because the State Department hasn’t signed off. The State Department,” he explained, “has to sign off on any mission—they don’t pay tax, they don’t pay property tax”—nearly $40,000 a year—”they don’t pay the mansion tax.”
“State says it’ll take a week, but if you don’t hear anything within two months, just consider it approved.” (Heartening!) “So she moves out with her three kids, and every day they say, ‘When’s the closing?’ Nothing from the State Department, so we’re thinking, it’s going to be two months?! She’s thinking, ‘I have this $20,000-a-month mortgage and carrying costs plus I just rented an apartment with three kids!’ “
Eventually the Department of State came through, but it was a harrowing experience, said Mr. Thrasher. “And the whole time the ambassador is calling me, complaining about our government!”
Still, he sees a lot more diplomatic buyers in the East Side’s future, especially given the tax advantages. “Now I think the majority of them are going to start buying, especially for the ambassadors who have large families, huge entertainment needs. It’s a minimum $20,000 rent, so why not buy for $3 or $4 million?”