MOSCOW—They were the finest places in Moscow, the most exclusive apartments in the entire Soviet Union, and they were awarded to Communist Party bosses, hero-generals, servile poets and KGB assassins.
Now these storied old apartments—minus the listening devices and the brooding portraits of Comrade Lenin—are for sale on a bourgeois Moscow home market that's grown so fast and so quickly that people worry about a real estate bubble that might burst.
Only a dozen years ago, private residences didn't exist in Russia. The communist state owned everything, from farms and factories to houses, apartments and summer cottages. The idea of someone selling land, a house or an apartment was preposterous, impossible, treasonous.
That was then. Alexander Ziminski, a leading real-estate broker in Moscow, said he now had a waiting list of buyers looking for apartments in the $1 million to $1.6 million range. Only 5 percent of his buyers are foreigners.
The Russian economy is humming along, largely because of record-high prices for oil and natural gas. Salaries and living standards in the countryside remain abysmal, but the capital is flush with cash.
Moscow's streets are increasingly jammed with new luxury sedans, SUVs and limousines. Several new—and ever-more-expensive—restaurants seem to open every weekend. A gossipy new book about Moscow's fanciest neighborhood features a woman who has a live-in masseuse and dyes her poodle to match her outfits.
The buildings of the Soviet elite were almost majestic in their ornamentation and construction. Many of the best were built between 1890 and the 1930s.
The apartments had luxuries unknown to most Soviet citizens: working telephone lines, reliable heat, electricity and elevators, and, most precious of all, plenty of room.
Real estate agents today are divided about whether a famous name—or an infamous one—can boost the price of a high-end apartment. Some said a well-known former resident could add as much as 30 percent to the price, though others said there was no discernible bounce.
But brokers were unanimous in saying that any apartment—whether it belonged to a Tchaikovsky, a field marshal or a Politburo member—must be renovated to Western standards to clear the million-dollar threshold. Celebrity status makes no difference if the residence is run-down.
"The notion of an elite building has changed," said Ziminski, the head of luxury-apartment sales at Penny Lane Realty, a high-end Moscow brokerage. "The celebrities and nomenklatura (the Soviet ruling elite) lived in these historic buildings, yes, but back then they had no parking. The roofs were bad. The wiring was bad.
"Basically, the only allure is the name, and this historical allure is much more interesting to foreigners than it is to Russians. These days, wealthy Russian clients want quality. They don't want history. They want new."
Ziminski said 8 of 10 wealthy buyers who came to his agency wanted apartments in brand-new buildings. Those who prefer older places insist that renovations be "total."
"You have to take them right down to the bare walls," he said. "When there's that kind of total renovation, the spirit disappears."
Some of the city's most graceful mansions and elegant townhouses have undergone wholesale renovations to become corporate offices, restaurants, clubs or embassies.
Lavrenti Beria, the feared and notorious head of Stalin's secret police, had a gorgeous mansion on Kachalova Street. Beria kept his family on one side of the mansion and used the other side for affairs with film actresses and star athletes whom he essentially kidnapped and raped. The mansion is now the Tunisian embassy.
The splendid building at 3-5 Romanov Lane is still one of Moscow's hottest "old school" properties. Built in 1898, one of its earliest reported tenants was Sidney Reilly, the British secret agent who might have been the inspiration for Ian Fleming's character James Bond.
In the 1930s and `40s, so many top generals lived on Romanov Lane (then called Granovksy Street) that the building became known as the House of the Marshals. Plaques on the building still commemorate former generals-in-residence such as Ivan Koniev, Kliment Voroshilov and Semyon Budyonny. Soviet Premier Alexei Kosygin lived there until his death in 1980.
When the Soviet Union collapsed in the early 1990s, most of the old soldiers and dethroned political bosses left Romanov Lane and moved to new apartments on Moscow's fringes.
Their former apartments have been gutted and renovated to first-class standards, although two flats remain in their Soviet-era condition. The current residents can't afford to renovate, and they're considering selling.
"They know what they have is valuable," Ziminski said. "They see their new neighbors. They see the cars they drive."
One of the apartments belongs to a Russian painter who lives in the Netherlands. He wants $2.5 million for an estimated 1,800-square-foot unrenovated apartment. The real market price, Ziminski suggested, is closer to $1.9 million.
"He's not worried," the broker said. "He says if it sells for his price, great. If not, he'll wait."
Meanwhile, builders can't seem to put up new apartments fast enough. Construction workers regularly can be seen pouring concrete in zero-degree weather, even at nights and on Sundays.
Ziminski said he had a regular inventory of over-the-top flats that went for as much as $10 million. Just beyond Moscow, huge multimillion-dollar villas have sprouted in the countryside like summer mushrooms.
The New Russians, as the rich are known here, demand the same amenities as wealthy clients anywhere, several brokers said.
They want penthouses, panoramic views, 24-hour doormen, electronic keys, walk-in refrigerators to hold furs and rooms for the maids, butlers and bodyguards. "Panic rooms" haven't yet caught on in Moscow.
One unusual wrinkle in Russian apartment sales occurs when the transaction takes place: No certified checks or bank transfers are accepted at the closing. Russian buyers bring suitcases full of cash—U.S. dollars only.
It's common knowledge among Moscow brokers and real-estate lawyers that a million dollars—in hundreds—fits nicely in a gym bag.
"We don't ask where the money comes from, of course not," Ziminski said. "Why would we?"
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(c) 2005, Knight Ridder/Tribune Information Services.
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