The Real Deal New York

Revealed: The NYC real estate players identified in the Offshore Leaks database

Investigation reveals offshore entities tied to Witkoff, Stonehenge, Nakashes: TRD analysis

April 04, 2016 06:53PM
By Ariel Stulberg, Katherine Clarke, Will Parker, Kyna Doles, Reginald Barley and Yoryi de la Rosa

Panema Papers

Stonehenge’s Ofer Yardeni, Ralph Nakash, the Witkoff Group’s Scott Alper, M1 Real Estate’s Azmi Mikati and a photo of the British Virgin Islands (credit: Scrub Island Resort)

Editor’s note: A previous version of this story misattributed the source of the information used. The data for this story came from the Offshore Leaks database, which is published by the International Consortium of Investigative Journalists, but is separate from the Panama Papers leak that came to light on Sunday. All attributions have been revised accordingly.

UPDATED, 2:48 p.m., April 6: The Panama Papers – the largest document leak in history – reveal how those operating at the highest levels of wealth and power make use of shadowy offshore shell companies and tax havens. The list, which came to light on Sunday, includes entities connected to the likes of China’s Xi Jinping and Russia’s Vladimir Putin. So far, the leak, from Panama-based law firm Mossack Fonseca, hasn’t established connections to prominent Americans, according to McClatchy and Fusion, two news outlets that collaborated with the The International Consortium of Investigative Journalists (ICIJ) on analyzing the leaks.

But a previous database published by the ICIJ, which was reviewed by The Real Deal after the Panama Papers came to light, shows that a number of prominent real estate figures who ply their trade in New York have similarly clandestine connections to offshore shell companies and tax havens.

Stonehenge Partners, Hirokuni Honzawa of Hiro Real Estate, M1 Real Estate, Scott Alper and James Stomber of the Witkoff Group, and nearly two dozen members of the Nakash family appear in the trove, alongside Chinese billionaires, Eastern European oligarchs, and relatives of dictators and politicians across the globe.

The database, known as the Offshore Leaks Database, covers more than 30 years of activity and is based on leaks from two offshore funds, Singapore-based Portcullis TrustNet and British Virgin Islands-based Commonwealth Trust Limited. Both firms specialize in helping the wealthy to set up offshore entities and secretive bank accounts.

Incorporating offshore is entirely legal. While these entities are sometimes used to hide assets and evade taxes or international sanctions, along with other illegal activities, there are hundreds of legitimate reasons for maintaining them, including investment diversification, legal tax avoidance, privacy and personal estate planning.

Here are the real estate players identified by TRD so far:

Witkoff

Witkoff, best known in New York for developing high-end condo projects such as 150 Charles Street and 10 Madison Square West and owning commercial assets such as the Helmsley Park Lane Hotel and the Woolworth Building, appears to have links to an offshore entity in connection with a project it worked on in London, the redevelopment of a landmark office building known as Devonshire House.

Officers of the entity, registered as Devonshire Realty Investment I Limited, include Scott Alper, the firm’s president and chief investment officer, and James Stomber, the general counsel and COO. Witkoff’s partners on the project included Investra Capital, a Dubai-based real estate investment and development advisory firm. Zaid Randeree, a managing director at Investra, is also listed as an officer of the offshore entity. Witkoff sold Devonshire House for close to $600 million in 2013 to Spain’s Amancio Ortega, founder of Inditex, the company that founded fashion brand Zara.

Alper told TRD that the move to register the offshore entity was “standard operating procedure on foreign investment” and that all U.S. taxes were paid in full.

Stonehenge Partners

Ofer Yardeni’s Stonehenge Partners is a major Manhattan landlord with a $3 billion portfolio of over 3,000 apartments and 3.5 million square feet. Stonehenge appears to have acted as an intermediary for Atzmon Levi, an individual who appears to be in the diamond business, when he set up an offshore entity known as Meshushe Limited back in 2002, according to the Offshore Leaks Database. Stonehenge is listed as the so-called “master client” of the entity. The company’s recent real estate deals include the 2015 acquisition of the Bradford, an Upper West Side rental property at 210 West 70th Street. A spokesperson for Stonehenge did not immediately respond to a request for comment.

The Nakash family

Many members of the Nakash family, best known as founders of the jeans brand Jordache, are identified in the Offshore Leaks Database as having entities offshore. The Nakash brothers — Joseph, Ralph and Avi — are all listed as officers of offshore entities, some dating back as far as the late 1990s, the documents show. Other family members are also listed as officers. In recent years, the family firm, Nakash Holdings, bought dozens of hotels, offices, residential and retail properties nationwide, including several in New York. Joe Nakash is also an investor in the New York Wheel, a 630-foot-tall observation wheel being developed on Staten Island. The family also owns the famed Versace mansion in Miami, which it bought for $41.5 million in 2013. A call to the Nakash offices was not immediately returned.

Hirokuni Honzawa

Hirokuni Honzawa, a co-owner of Hiro Real Estate, the same Japanese firm that once owned stakes in trophy assets such as the Mobil Building at 150 East 42nd Street and 650 Madison Avenue, is listed as a director of the offshore entity Top Performance Worldwide Limited, the Offshore Leaks Database shows. He is one of three members of the Honzawa family affiliated with the company. In 2014, Hiro gained notoriety in New York after it emerged that the firm reportedly owed millions of dollars in city and state taxes. The company sold the Mobil Building to an investor group led by David Werner for $900 million in 2014 and 650 Madison to Ashkenazy Acquisitions for $680 million in 2008. The firm has largely retreated from the U.S. real estate market.

M1 Real Estate

M1 Real Estate is a Beirut-based investment and development company with offices in Monaco, London, Dubai, and New York. It is best known here as the former owner of the Argonaut Building, a landmarked property at 224 West 57th Street which it sold to Abe Talassazan’s Eretz Group for $213.8 million in 2015. M1 has links to the offshore entity Cresta Overseas Limited, the Offshore Leaks Database shows. It is listed as a shareholder of that entity and its executive director and CEO Moustapha El-Solh is listed as a director. Cresta appears to have been used in a real estate transaction in Monaco, for the construction of a mansion on the Boulevard Princesse Charlotte. When asked about the offshore assets, a spokesperson for the company told TRD that the offshore holdings were completely kosher. “We’re an international company,” she said. “That should pretty much answer your question.”

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