President Joe Biden had a crystal clear message for Russian oligarchs: We’re coming for your assets.
“The United States Department of Justice is assembling a dedicated task force to go after the crimes of the Russian oligarchs. We’re joining with European allies to find and seize their yachts, their luxury apartments, their private jets. We’re coming for your ill-begotten gains,” Biden said Wednesday during the State of the Union. Just hours after that speech, French authorities announced they had seized a yacht linked to Russian oligarch Igor Sechin.
But it isn’t just Russian oligarchs who are on edge. Wealthy non-oligarch Russians are also fretting asset seizure. In the decades since the Soviet Union collapsed, rich Russians have poured gobs of money into American real estate. Now they’re worried they could get caught in the crossfire as the U.S. goes after Vladimir Putin’s allies.
Dolly Lenz, one of the most sought-after luxury real estate brokers in America, tells Fortune she’s getting inundated with inquiries from Russian clients who are considering selling their U.S. real estate holdings. Those luxury units—with a lot worth over $10 million—are in some of Miami’s and New York City’s most exclusive neighborhoods, including Billionaires’ Row in Manhattan.
“The heat is up. They’re scared that they’re going to have their real estate seized or potentially seized. Or linked to someone who is seized. They’re scared to death of [guilt] by association,” Lenz says. While she has yet to see a flood of Russian-owned luxury real estate hit the market, she says it’s on the horizon. “There are already more inquiries, and that’s how it starts. That’s how we know [a flood of listings by Russians] is coming.”
Not only are more ultrawealthy Russians looking to sell their properties, Lenz says, many want to cancel upcoming real estate projects and business deals, even if it means losing their deposit.
“We know of several deals where [Russian] buyers had put down money on new development—with significant deposits. And are deciding to not go through with the deal. That’s pretty bad…They told us they will walk away from the deposit if the climate stays this way,” Lenz says. In some cases, she says, they’d lose a deposit upwards of $15 million if they go through with exiting the real estate development deals.
Lenz also has Russian clients who are interested in off-loading property they own on Fisher Island. Located just off the shore of Miami, the island, which is dotted with luxury condominiums, has become an absolute hotbed for Russian billionaires and oligarchs. In 2017, a Russian buyer snagged the largest penthouse at Fisher Island’s Palazzo del Sol—a luxury condominium where Russian billionaire Aras Agalarov used to have a residence—for $31 million. Just last month, Russian hockey star Ilya Kovalchuk bought a $8.5 million condo at Fisher Island’s Palazzo Della Luna. Those two buildings, along with the island’s Palazzo Del Mare—where Russian businessman Igor Olegovich Nesterenko sold his five-bedroom unit last month for $21 million—in particular, are known for being sought-after by wealthy Russians.
But not everyone Fortune spoke with is seeing an influx of Russian luxury sellers. Stuart Siegel, global head of private office at Engel & Völkers Americas, says it’s too early to tell if the Ukraine invasion will correspond with a wave of Russians selling their U.S. real estate holdings. He says economic and political instability in Russia could even encourage some Russians—at least those who aren’t on federal watch lists—to cling to their American real estate holdings.
“In times of global turmoil, American real estate has always been viewed as a safe harbor,” Siegel says.
This story was originally featured on Fortune.com