April 17, 2009 - Franck Ruimy & Arium Properties, New York NY

CLOSE your eyes, click your heels, and repeat, “It is a good time to be in real estate.”

That is a message that Franck Ruimy, a London-based investment manager, has been sharing as he travels to New York and other cities, looking for trophy apartments for his European investors.

While wealthy Americans, fretting over vanishing bonuses, waning confidence and shrunken portfolios, are shying away from the trophies of yore, Mr. Ruimy has been investing in some of the most talked-about new Manhattan condominiums. His plan: buy them at a discount and rent them out for tens of thousands of dollars a month while looking for long-term price appreciation over the next 10 to 15 years.

At the end of March, Mr. Ruimy, operating through a series of limited liability corporations, closed on five apartments, including four contiguous units on the 17th and 18th floors at the Laurel, a 31-story limestone and glass tower at 400 East 67th Street, at First Avenue, for a total of $11.5 million.

But that was only a small part of the portfolio Mr. Ruimy has been assembling in Manhattan. Two years ago, he bought three apartments at 165 Charles Street, a glass tower in the West Village facing the Hudson River designed by Richard Meier. He paid a total of $17.7 million; one unit was recently listed for rent at $27,000 a month.

Last July, he bought a $6.85 million apartment at 40 Mercer Street in SoHo, a new 13-story condominium designed by Jean Nouvel, and listed it as a $28,500-a-month rental. Now he is in contract to buy a high-floor apartment at yet another glass tower, One Madison Park, a 60-story skyscraper nearing completion on East 23rd Street facing Madison Square Park.

Mr. Ruimy’s buying spree began as a way to take advantage of the euro’s strength against the dollar. That was before the cracks in the residential market became apparent to most buyers. Mr. Ruimy said he was able to negotiate significant discounts from asking prices even then. Today, he said, the deteriorating market presents “an opportunity.”

“We tend to be contrarian,” he said.

Mr. Ruimy is the chief executive of Aerium Properties, which has offices in London, Luxembourg and Geneva, and has invested billions of dollars in commercial properties across Europe for private and institutional investors. The firm now manages more than $9 billion in commercial real estate in Europe.

A few years ago, Mr. Ruimy created a fund for wealthy individuals to invest in high-end apartments in Paris, London and, eventually, New York, to be rented out to other wealthy individuals.

Wendy Maitland, a broker at Brown Harris Stevens who specializes in expensive properties, said that the rental market for luxury apartments had remained solid during the downturn, as some well-heeled individuals found it prudent to rent rather than buy.

Mr. Ruimy said he expected eventually to invest $250 million to $300 million in residential real estate. He said participation in his funds had remained strong as investors shifted money out of troubled investments. He said he had a long-term buy-and-hold strategy, using less borrowing than many real estate investors.

Last week, Mr. Ruimy was in Los Angeles, looking at bank-owned commercial and residential properties. “I am always looking for bargains everywhere,” he said. “It is a good time to be in real estate.”