Gulf investors are back in New York, and it’s happening faster than most people realize.
I spend my days studying the availabilities and changes in the inventory of commercial space in Manhattan, so when Saudi Arabia’s Public Investment Fund teams up with Related Companies to build a 1,200-foot tower at 625 Madison Avenue, I notice. When Qatar became the city’s biggest foreign investor in 2023, dropping $1 billion into the market, I noticed. When they bought the Park Lane Hotel for $623 million (from Steve Witkoff of all people), I definitely noticed.
It isn’t random. During the pandemic years, Middle Eastern capital basically disappeared from our market. Now it’s flooding back in, and these Gulf investors are buying assets that many walked away from.
And the thing is, they’re not just throwing money around. They’re being strategic about timing, taking advantage of pricing that won’t last forever, and they see something in New York’s recovery that others are missing.
Because when sovereign wealth funds with this kind of capital start buying back into Manhattan, they’re usually right about what comes next.
How Gulf Money Built Its Manhattan Empire
Gulf investors didn’t simply show up in New York yesterday with checkbooks ready. They’ve been quietly building their Manhattan empire for over 50 years, learning the game, making mistakes, and eventually figuring out how to turn oil money into real estate gold.
The story starts with Kuwait writing some of the first petrodollar checks in the 1960s and leads us to today’s Saudi Arabia dropping $200 million into a future 1,200-foot tower. Along the way, there were spectacular wins, devastating losses, and lessons learned.
The Petrodollar Pioneers Dip Their Toes (1960s-1970s)
Kuwait basically invented sovereign wealth funds back in 1953, but they had no idea what was coming. When oil prices quadrupled in 1973-74, they suddenly had what economists politely called an “embarrassment of riches.”
Their first moves were smart and cautious. Kuwait Investment Authority tested American waters with a $10 million stake in Atlanta’s $100 million Atlanta Center complex. Meanwhile, Kuwaiti buyers started quietly scooping up Manhattan office buildings at “the best addresses in town,” keeping deals deliberately low-profile because nobody wanted to deal with xenophobic blowback.
The move that really announced their arrival was Kuwait Investment Company’s $17 million purchase of Kiawah Island in South Carolina in 1974. Sure, it wasn’t Manhattan, but it showed Gulf investors were comfortable with U.S. land deals and started building the legal, banking, and advisory networks they’d need for bigger New York plays later.
Testing the Waters Gets Serious (1980s-1990s)
The 1980s brought more structure. Abu Dhabi Investment Authority, created in 1976, started moving money from sovereign bonds into equities and real estate. While London grabbed most Gulf real estate capital during this decade, Kuwaiti and Saudi families quietly accumulated minority stakes in Class-A Midtown offices through partnership structures that most people never heard about.
The real show-stopper came in 1995 when Prince Alwaleed bin Talal pulled off his Plaza Hotel coup. His Kingdom Holding partnered with Singapore’s CDL to buy the Fifth Avenue icon for $325 million, promising $28 million in renovations and $75 million in mortgage pay-down. Once Kingdom Holding partially cashed out in 2012, it walked away with a $32.9 million gain.
When Oil Money Went Shopping (2000s)
Once the 2000s came around, Gulf investors became Manhattan’s biggest spenders.
Qatar finally started making its presence felt after years of developing its massive North Field gas reserves. Their first notable New York purchase came in 2002 after acquiring the Lycée Français buildings on East 72nd Street for $26 million —a modest first step that would prove to be just the beginning.
But it was Dubai’s Istithmar World that truly captured the market’s attention. Between 2005 and 2007, the investment arm went on a $4 billion Manhattan shopping spree, fueled by cheap debt and oil prices that seemed destined to climb forever.
Their moves were aggressive and profitable—until they weren’t. Istithmar bought 230 Park Avenue (the Helmsley Building) for $705 million in 2005 and flipped it for $1.15 billion in 2007, pocketing a 63% gain. They grabbed 280 Park Avenue for $1.2 billion in 2006 and sold it for $1.35 billion in 2007.
But leverage is a double-edged sword. The W Hotel Union Square, purchased for $285 million in 2006, got foreclosed for $2 million plus debt in 2009 in the midst of the Financial Crisis. The Knickerbocker Hotel saw control slip away after similar troubles.
Abu Dhabi’s timing proved even more painful. Their 2008 purchase of 90% of the Chrysler Building for $800 million—right at the market peak—became a cautionary tale for the ages. When they finally sold in 2019 for around $150 million, the $650 million loss served as an expensive and cautionary lesson.
The Mature Money Phase (2010s)
The 2010s saw Gulf investors grow up fast in the post-Financial Crisis era. Kuwait Investment Authority came back swinging, buying 750 Seventh Avenue for $485 million in 2011 and joining Related in Hudson Yards through Coach’s 40% stake sale at 10 Hudson Yards in 2014.
Qatar’s sovereign wealth fund also began to find its groove, backing Boston Properties’ $2.8 billion GM Building purchase in 2008, buying 9% of Brookfield for $1.8 billion in 2014, and forming an $8.6 billion joint venture with Brookfield to develop Manhattan West. By 2016, they also acquired roughly 10% of the Empire State Realty Trust (owner of the Empire State Building).
The decade’s biggest success story, though, belonged to Saudi Arabia’s Olayan Group, which dropped $1.4 billion on 550 Madison Avenue in 2016. After pumping $300 million into gut renovations and ESG retrofits, they hit 96% occupancy by 2025 with rents above $100 per square foot.
Present-Day Trends: The Smart Money Era
Five decades of wins and losses created a new breed of Gulf investors. Gone are the speculative flippers of the 2000s and trophy hunters who got burned in 2008. Today’s Gulf money operates with surgical precision, picking spots carefully, building partnerships with blue-chip developers, and playing the long game.
The comeback numbers prove it: overseas buyers led by Gulf sovereign funds grabbed about $2.1 billion in Manhattan properties in late 2024 and early 2025, five times what they bought the year before. Qatar alone dropped $1 billion into NYC buildings in 2023.
Qatar Becomes the New King of Manhattan
Manhattan’s biggest Gulf investor spender is now the Qatar Investment Authority, and the receipts prove it. QIA dropped $1 billion in 2023 alone, making it the top foreign investor in NYC that year. Their Manhattan portfolio now spans over 10 million square feet, ranking them as the ninth-largest commercial property owner in the city.
Their crown jewel is Manhattan West, an 8-acre, $8.6 billion mixed-use development where QIA holds a 44% stake through a partnership with Brookfield. When they sold a 49% stake in One Manhattan West to Blackstone in 2022, they valued the 67-story office tower at $2.85 billion, proving their investment thesis worked.
QIA’s flashiest recent move was grabbing the Park Lane Hotel at 36 Central Park South for $623 million in 2023 from Steve Witkoff. The 46-story, 600-room luxury hotel overlooks Central Park and shows Qatar’s continued obsession with trophy hospitality assets.
Saudi Arabia Goes Full Developer Mode
Saudi Arabia’s Public Investment Fund committed to its largest NYC project through a two-thirds ownership stake in 625 Madison Avenue. The $1+ billion project involves PIF partnering with Related Companies to build a 1,200-foot tower one block from Central Park, with $200 million already invested.
The Madison Avenue project evolved from PIF’s initial 2020 strategy, when it made a convertible debt investment in Related Companies that could convert to a 15% equity stake. This gave PIF consultation rights on numerous Related projects and access to the developer’s broader portfolio, including the $25 billion Hudson Yards development.
Originally planned as a 68-story mixed-use development, the project pivoted to 840,000 square feet of Class AA office space to meet market demand. The development involves demolishing the existing 1956 Nabisco headquarters building, which Related bought for $630 million in 2024.
UAE Plays Chess While Others Play Checkers
Since 2020, the UAE’s investments have evolved from direct property ownership to strategic partnerships and alternative investment vehicles. While Abu Dhabi Investment Authority and Mubadala maintain significant historical NYC holdings, new direct acquisitions have been limited.
ADIA’s existing portfolio includes 330 Madison Avenue (full ownership in 2019 at $900 million valuation), the Time Warner Center ($1.3 billion purchase with Singapore’s GIC in 2014), and stakes in luxury hotels, including the London NYC Hotel ($382 million acquisition).
Mubadala shifted toward alternative real estate lending through strategic investments like its participation in 3650 REIT, committing up to $4 billion alongside CalSTRS for alternative commercial real estate financing. The company’s $3 billion acquisition of Fortress Investment Group in 2023-2024 provides indirect NYC real estate exposure.
Kuwait Keeps It Low-Key but Keeps Winning
Despite managing $1.029 trillion as the world’s fifth-largest sovereign wealth fund, the Kuwait Investment Authority maintains a deliberately low-profile approach to investing in NYC commercial real estate. KIA’s biggest holding is its stake in Hudson Yards through a partnership with Related Companies and Oxford Properties, established in 2013.
KIA cashed out a portion of its 20% stake in 10 Hudson Yards by selling interests to European insurer Allianz for $432 million in 2019. The 52-story, $2.15 billion office tower demonstrates KIA’s preference for stable, long-term investments in premier mixed-use developments rather than speculative acquisitions.
The New Manhattan Map
Gulf investors cluster around Manhattan’s most prestigious corridors with laser focus. The heaviest concentration centers on Central Park South and 57th Street (“Billionaires’ Row”), where Qatar owns the Park Lane Hotel and provided financing for 111 West 57th Street.
Hudson Yards represents another major concentration point, with multiple Gulf entities holding stakes in the $25 billion development. Qatar’s Manhattan West sits adjacent to Hudson Yards, while Kuwait and UAE entities maintain interests in various Hudson Yards properties, creating a Gulf-controlled corridor on Manhattan’s Far West Side.
The overwhelming concentration in Manhattan (90%+ of Gulf investment) reflects preferences for trophy assets and global gateway locations. Gulf investors learned that prestige and stability matter more than chasing higher returns in unproven areas.
Why Are Gulf Investors Buying Back In Now?
So the multibillion-dollar question: why are Gulf investors buying back in now? Namely Qatar? The answer comes down to five simple factors that make Manhattan irresistible.
- Trophy Hunting for Global Bragging Rights: Small Gulf states have limited domestic investment opportunities relative to their massive oil wealth, so owning marquee NYC buildings extends their global footprint and prestige. When Qatar pays $600 million for a money-losing Plaza Hotel, the returns are partly political and social, not just financial.
- Fire Sale Pricing on Prime Real Estate: New York’s commercial real estate saw significant price corrections post-pandemic, creating buying opportunities for cash-rich Gulf investors. Witkoff’s Park Lane Hotel sold in 2023 for about $30 million less than he paid in 2013.
- Unlimited Cash Meets Friendly Politics: Gulf sovereign wealth funds sit on hundreds of billions and face pressure to diversify beyond oil markets. U.S. officials have signaled eagerness to attract Middle Eastern investment, even considering reforms to “fast-track” deals from the UAE, Saudi Arabia, and Qatar.
- Hedging Against Oil Volatility: Gulf economies use Manhattan real estate to spread risk, with dollar-denominated assets providing steady rental income and inflation protection that oil revenues can’t match. New York buildings are as liquid as foreign oil fields but without the same geopolitical exposure.
- Diplomatic Chess Moves: Gulf investors also use NYC real estate as a tool of diplomacy, with Qatar cementing ties to the U.S. through economic means after hosting the largest American airbase in the region. Qatar’s multi-billion-dollar U.S. investment commitments were as much about goodwill and influence as profit.
Where Gulf Investors (and Market Forces) Go From Here
Gulf investors showed their hand with $10 billion deployed since 2020, but their next chapter depends on what happens in City Hall and Washington.
Saudi Arabia’s $1+ billion bet on 625 Madison Avenue signals confidence that Manhattan offices will recover, but if remote work sticks around, expect Gulf funds to pivot fast. Qatar’s QIA already co-financed an $850 million purchase of luxury apartment towers on Sutton Place, showing they’re ready to chase residential and hospitality deals.
Don’t overlook the Zohran Mamdani effect either. Sure, he may align in some ways with these Gulf nations, but from a business standpoint, if he becomes mayor in November, he could shake things up with rent freezes and higher corporate taxes. South Florida agents already saw a 50% jump in web traffic from wealthy New Yorkers after his primary victory, and Gulf funds notice these shifts.
The smart money says Gulf investors will diversify beyond offices into hotels, luxury rentals, and logistics centers. They’re also eyeing competition from Miami and Los Angeles if New York becomes less investor-friendly.
Yet Manhattan, no matter what, offers something no other city can match: scale, liquidity, and global prestige. Gulf investors helped make Manhattan “one of the world’s most dynamic, resilient and desirable” real estate markets, and they’re planning to keep it that way—on their terms.
