Featured News 2015 Shell Companies Dominate New York City Real Estate Market

Shell Companies Dominate New York City Real Estate Market

The real estate market can be extremely competitive and complicated, especially in booming New York City. As one of the leading and most luxurious markets in the entire world, NYC is prone to more than just competition. According to an investigation done by the New York Times, many of the real estate transactions done in the city are much more secretive than many would expect. Some of the most valuable and coveted properties and residences are owned by anonymous shell companies that are seemingly set up to allow foreign buyers—particularly criminal ones―to purchase condominiums for both investment and personal use.

How can this activity go on in one of the most well-known markets in the country, let alone the world? There is a glaring regulatory loophole that allows for these foreign buyers to put their money into New York City real estate, whether clean or dirty. It not only serves to make the market even more competitive, but less transparent as well.

Can these real estate practices really be legal?

This practice not some small operation, as some of the most valuable real estate in New York City is being swiftly purchased by these anonymous companies at a stunning rate. With no legal imperative to delve deeper into the identities of the buyers, there is little to no regulation over who is gaining ownership of the property. It is suspected that numbers of wealthy, known criminals have come to own a large chunk of the city's most desired real estate property.

Just five years ago, a powerful Russian banker and politician who has been tied to criminal activity and banned from Canada, bought up a $15.65 million condo in the Time Warner Center. In 2014, a prominent Greek businessman who owns a $21.4 million unit in the same building was arrested on charges of corruption. These untraceable purchasing methods have allowed potentially dangerous criminals to secure a tight hold on New York City's real estate market with their questionable funds.

While many are calling for heightened regulations to prevent these shell companies from further empowering these individual, there has been little action taken yet. As a result of this continued lack of regulation, the market is now at the center of serious global political realities that may bring even more controversy to the city.

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