Foreign governments have emerged as an engine of growth as the city's real estate market struggles to shrug off the doldrums, becoming major buyers of townhouses, office condominiums and other properties.

Sri Lanka's Permanent Mission to the United Nations is looking to spend about $6m to purchase Manhattan office space, brokers say. Laos in February paid $4.2m, all cash, for a five-story townhouse in Murray Hill.

Even the Western Hemisphere's poorest country – Haiti – was gearing up to bid on a Second Avenue office condominium when the earthquake struck and derailed its plans.

Foreign governments "are almost the only game in town," says Ken Krasnow, a managing director with building-sale specialist Massey Knakal.

Wall Street Journal