Investors from Britain, Ireland, Italy, Spain, Korea, and elsewhere around the world are pouring foreign capital into the New York City residential and commercial real estate market. Favorable exchange rates, soaring market values, and the promise of steady returns are attracting a record number of foreign investors into the city.

“Within the past six months, we have been introduced by investment brokers to private families from Singapore, South Korea, and a Middle Eastern royal family” interested in investing in New York City real estate, the managing member of Murray Hill Properties, Norman Sturner, said. “New York City is a favorite destination, and when these individuals see this spectacular, safe, hospitable, and entertaining city, they naturally want to invest.”

He added that China has more than $1 trillion of U.S. treasury bills and notes in its ever-expanding balance of trade accounts. “We are their largest trading partner,” Mr. Sturner said. “If they invest just 2% in New York City real estate that is $20 billion of equity.”

Institutional and individual investors from Ireland are particularly bullish on New York City. Individual Irish investors are very active in purchasing units in residential condominiums in Manhattan. The Dublin-based Keane Mahony Smith Commercial has initiated the purchase of hundreds of condominium units. As noted on its Web site: “Buy with us and you buy at a fixed, discounted price before the properties hit the US Market. You can expect a rental income of up to 5% as well as a significant capital and currency gain on selling.”

In particular, two condominium developments have been pre-sold to the Irish investors through Keane Mahony Smith. Irish investors bought all the units in the 46-story residential condominium tower rising on the northwest corner of Eighth Avenue and West 46th Street, known as 733–736 Eighth Ave., which will have 250 apartments. The same development team is building a 100,000-square-foot condominium building at 225 E. 34th St., between Park and Madison avenues.

Because of the efforts of Keane Mahony Smith Commercial, condominium developers have been able to pre-sell units in the building without incurring some of the associated soft costs of development. The Irish investors have also purchased condominium units in J.D. Carlisle’s Centria at Rockefeller Plaza, a 34-story building at 18 W. 48th St., just south of Rockefeller Center, containing 152 units, and in the company’s latest development Gramercy Green, at Third Avenue and East 23rd Street. Irish investors who prefer to own units on 42nd Street near the Hudson River are able to purchase units in the Moinian Organization’s Atelier, through deals made with Keane Mahony Smith.

“There has been a huge increase in the number of foreign investors that have expressed interest in investing and developing projects in New York City,” the chief operating officer of Citi Habitats, Gary Malin, said. “The strength and stability of our city lends added appeal to foreign investors. We represent clients from Ireland, Korea, and other Asian countries buying properties as rental investments, or to flip, depending on their investment strategies. We have received inquires from potential investors from England, the Middle East, and many European countries seeking to purchase blocks of units.”

The managing partner at Massey Knakal Realty Services, Tim King, said, “I am a member of the Irish American Building Society, and we receive numerous inquiries from investors in ‘the old country’ about opportunities in the States.”

Late last year, a joint venture of Dublinbased Anglo Irish Bank and Timothy Haskin formed Peninsula Real Estate Fund I LP and Peninsula Real Estate LLC. The entity acquired the Beekman Tower Hotel at 3 Mitchell Place and the Eastgate Tower Hotel at 222 E. 39th St.

Anglo Irish Bank Corp. made its first acquisition in September 2004, when it purchased the 372,000-square-foot office building at 222 E. 41st St. for $210 million from the United Nations Pension Fund.

Last month, the British private equity group Dawnay Dale made its first acquisition in America. It bought a portfolio of 48 walk-up and elevator apartment buildings for about $225 million. The portfolio includes 1,141 apartments and 67 retail stores. Dawnay Dale is one of Britain’s largest private equity groups, owning more than 410 commercial properties in Britain and Europe.

“Foreign investment in commercial properties has been transparent for years, and recently we have seen transparent investment in the multifamily sector,” the chairman of Massey Knakal Realty Services, Robert Knakal, said. “For many years this sector of foreign investment has been in the form of equity financing for local operators. This continues in a more significant way than most people could imagine, and today we are seeing this demand show it more overtly.”

One of the most active foreign investor groups is led by the Austria-based Macquarie Bank. In 2006, the consortium, which included Australian superannuation funds and institutions MTAA Superannuation Fund, Australian Retirement Fund, Westscheme, and Statewide Superannuation Trust, acquired a 52.5% stake in the New York-based parking company TMO Parent LCC, operating as Icon Parking Systems. ICON Parking was owned by the company’s founders, the Mallah family and Goldman Sachs Whitehall Street Real Estate Fund. Last month, ICON Parking sold the six-story parking garage at 63–67 W. 35th St. for $31 million to Brack Capital Real Estate. As I reported last month, Brack plans to build a 300-room hotel on the site. Brack Capital Real Estate-USA is a subsidiary of Brack Capital Real Estate, part of Brack Capital Group, an Israelbased global holding company.

In March, Lev Leviev of Africa Israel USA, based in Israel, entered a 50/50 joint venture with Maurice Mann’s Mann Realty Service, purchasing the landmark residential rental building ,the Apthorp, at 2207 Broadway. The joint venture paid $426 million for the property. The senior financing for the property was provided by Anglo Irish Bank.

Late last year, a Barcelona-based real estate development company, Espais, made its first acquisition in America when it purchased the site at 39–45 E. 29th St., where a 31-story, 132-unit residential condominium will be constructed.

Development is scheduled to begin this year on a mixed-use residential condominium and hotel tower at 400 Fifth Ave., at West 36th Street. The site was acquired last year for $225 million by Italy-based real estate development company Bi & Di Real Estate from a joint venture of Yitchak Tessler and Lehman Bros.

The 107-room Dylan Hotel, at 52 E. 41st St., is a boutique hotel in the former Chemists Club building. Last month, the Madrid-based Losan, a real estate investor specializing in hotels, paid $90 million, or about $850,000 a room. The purchase represented the company’s first acquisition in North America.

For more than 20 years, Wafra Investment Advisory Group, beneficially owned by the Public Institution for Social Security of Kuwait, has been an active investor in real estate. Originally founded to manage funds in America for financial institutions of Kuwait and other Gulf states, Wafra has broadened its mission and now serves more than 30 institutional and private clients from around the world. In July 2005, a joint venture of Wafra and Normandy Real Estate Partners paid $33.7 million to acquire the 13-story, 139,000-square-foot office building at the foot of the George Washington Bridge in Fort Lee, N.J. In March, the joint venture sold the property for $44.4 million. The sale represented one of the highest prices per square foot ever paid for an office building in the Fort Lee submarket.

The largest commercial bank in Korea, Kookmin Bank, now owns KB Investment Trust Management Co., a joint asset manager with ING investment, which manages $10 trillion won of assets. According to real estate sources, KB Investment Management invested about $183 million with Tishman Speyer and its investment partners, the Blackrock Group and the California State Teachers Retirement System, in the $5.4 billion purchase of Stuyvesant Town/Peter Cooper Village.

New York is not the only American city to witness an influx of foreign capital into its real estate markets. “In the past year, we have represented a consortium of South American investors in connection with the acquisition of several large office buildings in the Chicago Loop,” a partner in the Chicago office of Greenberg Traurig, Michael Fishman, said. “The clients are attracted to the market because of the transparency of our legal system, the availability of attractive financing at historically low interest rates, and the liquidity of these types of real estate assets relative to real estate assets outside of the U.S. Investors believe that investment in large and dynamic 24/7 cities provides prospects for long-term appreciation.”

One has to agree with Mr. Knakal of Massey Knakal when he says: “We are experiencing a global economic boom as never has been seen before, providing capital creation at unprecedented levels. The deployment of much of this capital is targeted toward investments in the U.S., and specifically, New York real estate.”

Mr. Stoler, a contributing editor to The New York Sun, is a television broadcaster and a senior principal at a real estate investment fund. He can be reached at mstoler@newyorkrealestatetv.com.