88 Leonard Street
Chicago-based real estate investment firm Waterton Associates closed on the first part of its purchase of 88 Leonard Street from Africa Israel USA this evening, the firm’s managing member and co-founder, David Schwartz, confirmed.
Waterton closed on a 49 percent stake of the 352-unit rental building near Broadway in Tribeca for $37 million. Schwartz, whose firm was represented by Steven Vegh of Multi Investment, said the transfer of Africa Israel’s remaining stake, the senior mortgage and the mezzanine loan would close sometime in the first half of 2012. The prices for those components were $17 million, $132 million and $24 million, respectively, according to a previous report by Bloomberg News, for a total cost of about $210 million. The deal is being closed in two stages for accounting purposes, according to Schwartz.
The purchase was funded by the $500 million Waterton Residential Investment Fund 11 and marks the firm’s second purchase in New York City. It also bought the notes on the Addison Brooklyn at 221 Schermerhorn Street in Downtown Brooklyn last December. Schwartz said the firm has more New York City transactions pending as it looks to build its presence in the area, but declined to discuss the deals until they close. [more]

Two Financial District condominiums, the Africa Israel-developed 20 Pine Street and the Hakimian Organization-sponsored 75 Wall Street, held a joint open house to showcase their remaining units to brokers (see photos above).

The event started at 20 Pine, which is entering its final sales stage as only about 25 of the 412 units remain on the market. Sales started in the building in January 2006, according to Streeteasy.com, and Warburg Realty serves as the exclusive marketing team. Brokers were shown unit #2503, a 706-square-foot studio asking $925,000; unit #3104, a two-bedroom, 1,573-square-foot apartment asking $2.35 million, and PH12, a two-bedroom, 1,829-square-foot penthouse asking $2.8 million. – Adam Fusfeld Comments

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From left: Lev Leviev, 5 Madison Avenue, 229 West 43rd Street, the Apthorp and the Marquis Miami

If the goal of real estate investors is to buy low and sell high, then, according to the Wall Street Journal, Africa Israel’s U.S. investments have failed miserably. Like Japanese real estate investors that lost big on late 1980s purchases of the Pebble Beach golf resort and Rockefeller Center when a recession hit a few years later, Africa Israel’s purchases of the Clocktower Office Building near Madison Square Park, the former New York Times headquarters on West 43rd Street, the Apthorp on the Upper West Side and the Marquis Miami Condo-Hotel will likely result in big losses. For example, the company is in contract to sell the Clocktower building to Tommy Hilfiger for $170 million, despite paying $200 million for the building and spending millions more to convert it to condominiums. Worse, the company is selling 11 of the 16 floors of the Times headquarters to Blackstone Group for $160 million, despite paying $525 million for the entire building in 2007. [more]

Africa Israel has agreed to sell Tribeca’s 88 Leonard Street, built in 2007, to an anonymous buyer, in a deal that values the 352-unit tower at $222 million, Bloomberg News reported. The building went into contract this week, U.S. CEO Tamir Kazaz said.

“It’s a good deal for us and a good deal for the buyer,” he said. “The buyers are sophisticated real estate investors with tremendous experience in management of rental apartments, which I trust will continue to increase the value of this asset.”

Africa Israel will sell a 49 percent stake in the property for $37 million within 60 days and then its remaining share for $17 million after 6 months. [more]

Themed restaurant chain Jekyll & Hyde is moving out of its flagship club at 1409 Sixth Avenue later this year, and in the meantime, the landlord has put the building up for sale for $19.5 million.

The ornate, five-story property, between 57th and 58th streets, belongs to developer and Holocaust survivor Sam Domb, who owns both the Travel Inn and the Belvedere hotel in Midtown and the Lucerne hotel on the Upper West Side. Jekyll & Hyde currently occupies the entirety of its roughly 12,000 square feet, which is also being marketed for lease to single-tenant users for $600,000 per year by Newmark Knight Frank. According to Alon Chadad, one of five co-founders of brand-new brokerage Blu Realty Group, he and his colleagues have been quietly marketing the property to buyers for the past two weeks. Comments

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Richard Marin, the ousted CEO of developer Africa Israel USA, is suing his former employer for $1.25 million plus damages over an alleged breach of contract, the Wall Street Journal reported. According to court papers filed last week, Marin, who was hired in late 2008, said Africa Israel fired him “in order to cover up wrongdoing that the executive discovered and reported” without paying him the bonus he deserved. Africa Israel has denied the charges — accusing Marin of trying to sue his way out of paying back a $500,000 loan to the company — and said it plans to file a motion to have the case dismissed. [more]

From left:Hilfiger, Lev Leviev (Africal Israel’s chairman) and 5 Mad.

Clothing designer Tommy Hilfiger is to buy the Clock Tower building at 5 Madison Avenue for $170 million, according to the Wall Street Journal, though current owners Africa Israel USA, the stateside branch of Africa Israel Investments, an international holdings and investments group, did not disclose the buyer in securities documents filed Thursday in Israel.

Africa Israel had previously intended to turn the building into condos, said the Journal. [more]

229 West 43rd Street

Private equity firm Blackstone Group paid $160 million for the top 12 floors of the
old New York Times Building at 229 West 43rd Street, owned by a partnership of
real estate developer Africa Israel USA and private equity firm Five Mile Capital,
the sellers announced in a statement.

Blackstone bought the office condominium comprised of a portion of the 4th floor
as well as floors 5 through 16, Africa Israel said in the statement. The sale closed
this afternoon.

The exact size of the condo was not released, but public records indicate it is
about 600,000 square feet of the 745,000-square-foot building, which would
amount to a price of $267 per square foot. [more]

The developers of the Upper West Side’s Apthorp condominium, led by Africa Israel, have filed suit against a state housing
agency alleging the building is suffering financially because an application to deregulate 45 rent-stabilized apartments has dragged on for more than nine months.

Apthorp Associates, in the April 4 lawsuit, alleges the New York State Division of Homes and Community
Renewal has sat on the application since June 2010, and urged the court to force the agency to make a
determination.

“DHCR’s delay in processing the proceedings has denied the petitioner an increase in its monthly cash
flow required for the preservation, maintenance and operation of the subject premises,” said Apthorp
attorney Daniel Roskoff, in the petition. [more]

Maurice Mann, the original developer of the Apthorp
condominium conversion, has filed a new lawsuit against his
former partners, alleging they reneged on an agreement to let him
buy an apartment at the building.

Mann, in a lawsuit filed Monday in New York state Supreme
Court, alleged that in 2009, his former development partners,
Apthorp Associates and Broadwall Management, agreed to sell
him apartment 2C at the building, but then refused and offered him
apartment 6A.
Mann initially agreed to buy the historic Apthorp at 390 West End
Avenue in 2006, and later brought in Africa Israel chairman Lev
Leviev as his partner in a record $426 million acquisition. [more]