You might have caught Morley Safer on Sunday grumbling about "the Russians" who come into the world's biggest art fair to buy everything up. Safer may be a philistine who looks like Huckleberry Hound, but he was right: Russians can't cram their fortunes into the United States fast enough, particularly when it comes to paying record prices for New York real estate. The billionaire fertilizer tycoon who paid the highest-ever for an apartment for his 22-year-old daughter ($88 million) has spent $188 million on property in the U.S. alone. Why shovel this money into America? Because they don't want to end up writing sweet op/eds for the New York Times from a Russian penal colony.
“I think that Putin scares them to death,” a Russian born real estate broker tells the Times. "You can't have so many droves of people here purchasing at such high rates of speed if things were O.K." Indeed, so eager are the Russians to spend their money, they "typically end up spending twice their original budget." Five percent of the $84 billion in Russian capital that left that country last year went to real estate in the U.S.
And once they purchase the homes (that some of them never set foot in), they spend millions to renovate them. Vladislav Doronin, a construction tycoon who dates Naomi Campbell, spent $16 million on a home in Miami Beach then another $20 million to presumably replace all the light switches with Kandinskys.
It seems they've learned the lesson of Mikhail Khodorkovsky, the Russian billionaire oil oligarch who was one of the richest people in the world—until his wealth and influence challenged the government. The state froze his shares in his company, threw him in jail on bogus tax charges, and jailed him after a sham trial. Khodorkovsky has now become something of a human rights activist from prison. Better to be sipping champagne at 15 Central Park West.
