Over the past decade, a number of prominent Israeli investors have had their ups and downs investing in New York City real estate. Some of these investors who have experienced hardships include Yair Levy, Shaya Boymelgreen and Africa Israel Investments, controlled by Lev Leviev, the company which purchased the former New York Times Building in Times Square.
While foreign investors with billions of dollars of capital sit on the sidelines, a few new Israeli investors are testing the Manhattan commercial real estate waters. With prices at record lows, these investors hope to capitalize on the record low prices of property in New York City.
Last week, an agreement in principal was signed between Bank Leumi to provide a $210 million, 10-year mortgage to IDB Holding and subsidiaries IDB Units and Koor Industries and sister company Property and Building Corp. The joint venture entered into a contract last year to purchase the property for $330 million.
This month, another Israeli firm Aura Investments, together with two U.S.-based partners Livorno Properties and U-Trend closed on the purchase of an 80-unit apartment building and adjacent commercial lots in Manhattan.
The joint venture paid approximately $18.7 million for the property, which they plan to convert into an extended stay rental apartment building. The joint venture obtained a $10 million first mortgage from New York Community Bank for the financing of the property. According to Israeli business news publication Globes, the joint venture will spend an additional $3.5 million on renovations and extensions on the property.
Michael Stoler is a columnist for The Real Deal and host of real estate programs “The Stoler Report” and “Building New York” on CUNY TV and on WEGTV in East Hampton. His radio show, “The Michael Stoler Real Estate Report,” airs on 1010 WINS on Saturdays and Sundays. Stoler is a director at Madison Realty Capital as well as an adjunct professor at NYU Real Estate Institute, and a former contributing editor and columnist for the New York Sun.