Why Are Israeli Investors Returning Now to New York?

“A growing number of Israeli investors are approaching me about the possibility of investing in New York real estate,” says Kobi Lahav, a New York real estate consultant. “They are looking for investment options overseas because of the uncertainty in Israel – and post-Covid New York is once again the most attractive and stable destination in the world for investing in real estate.”

Before the pandemic, New York, London and Hong Kong were considered the three leading cities for real estate investments. Both Hong Kong and London suffer from domestic issues that negatively impact their real estate markets. “New York remains the most stable city. Its status was boosted following its rapid recovery from the Covid crisis. The expected drop in interest rates in the U.S. also offers opportunities for investors,” Lahav notes.

According to Lahav, who has many years of experience with New York real estate, the city’s real estate market is flourishing. “Rental prices are at an all-time high because people once again want to be in the city, and the demand for large apartments has grown considerably now that many people work from home. Since higher interest rates have caused people to prefer renting over buying, buyers enjoy higher returns on their investments.”

Window of opportunity

Although a rise in interest rates in the U.S. led to a decline in apartment prices in New York, Lahav believes that this drop is temporary. “Since rental prices are so high, I predict that as soon as they will start lowering interest rates, prices will quickly increase – possibly already in 2024-2025. Therefore, the window of opportunity for finding cheaper properties is the next six months to one year,” says Lahav.

New York has a big advantage compared to cities such as Austin and Miami, since its market is stable over time and New York has very limited space for building, which ensures that properties maintain their value. “Moreover, the entire industry is very regulated, and a great deal of public information is available. Here, realtors can’t play games and, in this respect, investors enjoy peace of mind,” adds Lahav.

One-stop-shop

Lahav holds a L.LB. in Law from the Hebrew University of Jerusalem and an MBA from NYU specializing in Finance, Banking and Management. In addition to being the Sales Manager of a large real estate company, he owns a business for investing in student housing, founded another business for renting offices for mental health professionals and is on the Board of a Real Estate investment company in Florida. Lahav founded his company in order to offer a “one-stop-shop” for investors. He designs an investment strategy for his clients that is based on the amount and purpose of the investment. “If an investor says ‘I have half a million and that’s it, I’ll tell him that the investment must be safe, without surprises. Some people want to buy a property in Manhattan as a status symbol; others want to get property appreciation. In that case, you have to take into account that carrying costs are high here,” he explains.

Lahav focuses on the person and the risk they are willing to take. “In any case, in New York the market is not very speculative, especially in Manhattan, where the risk is very low. Even during Covid, when the value of some properties took a 40% dive, it only lasted half a year,” he notes.

The service Lahav provides doesn’t end with the purchase of the property; it continues with its management. Property management is free of charge, with commissions paid by the renters. If the property requires significant renovation work, Lahav will oversee the renovation as well as find renters.

Lahav’s office is the investor’s contact point with the world of local real estate. “I might tell an investor that the market is at a record high and maybe this is the time to sell, or the other way around. Or when is the right time to refinance and invest in an additional apartment. The management is ongoing over time, and this is the major added value I offer.”

The renewed interest by Israeli investors is relatively recent, and it is the result of instability in Israel, Lahav explains. “We are seeing a flow of people who put a million dollars aside and want to invest them outside of Israel, in a safe market like New York,” he says. “Now, for example, the prices of large residential complexes are slightly dropping, but you won’t find bargains here for $200,000. On the other hand, the return on the investment in New York is among the safest in the world.”

partnered with Kobi Lahav