Israeli investors bullish on Manhattan

By Michael Stoler | October 20, 2010 03:00PM

According to the Association of Foreign Investors in Real Estate, the United States is still the most attractive country to invest in for real estate. The top three cities, as rated by AFIRE, are Washington D.C, New York City and San Francisco. Based upon investment sales this year, it looks like Israeli investors who have invested in the Big Apple are once again becoming very bullish on Manhattan.

One long-time active, private investor in Manhattan and around the nation is the Ofer family. Sammy and Eyal Ofer are the owners of Miller Global, which controls Eastgate Properties. Eastgate owns office buildings at 845 Third Avenue, 99 Park Avenue and 120 Park Avenue, and co-developed residential condominium 15 Central Park West with Zeckendorf Development. In August, Eastgate paid $60 million to the Salvation Army for the Parkside Evangeline Residence for Young Women at 18 Gramercy Park South, the 17-story, 83,000-square-foot building that formerly provided women with inexpensive temporary boarding.

Earlier this month, Gaia Real Estate announced a partnership with Harel Insurance Investments & Financial Services, one of Israel’s largest insurance companies, to invest in residential real estate throughout the U.S., with a particular focus on buying rental buildings in the New York area. 

On the same day it announced the partnership, Gaia pronounced the acquisition of several hundred residential units in three separate transactions: a 48-unit building at 5 West 91st Street for $16.75 million; a 20-story, 265-unit high-rise at 320 South Harrison Street in East Orange, NJ, for $30 million, and a 92-unit multi-family property at 38 Balaban Road in Colchester, Conn., for $5.4 million.

Last week, it was reported that the Fishman Group, one of Israel’s largest and most renowned private investment groups, had entered into a contract to purchase a $50 million mortgage on the 160,000-square-foot office building at 218 West 18th Street.

In May, Long Island-based Kimco Realty, one of the country’s largest real estate investment trusts, announced that it had formed a joint venture with Big Shopping Centers, an Israeli publicly traded company to acquire high-quality neighborhood and community shopping centers throughout the U.S. In June, the joint venture closed on a portfolio of 15 neighborhood and community shopping centers for approximately $422 million.

In April, Tel Aviv Stock Exchange, IDB Holding, its subsidiaries Koor Industries and Property and Building, completed the purchase of the HSBC headquarters at 452 Fifth Avenue. The company paid $330 million for the building and secured mortgage financing of $210 million for a 10-year loan from a syndicate of Bank Leumi Israel and its subsidiary Bank Leumi USA.

In March, McSam Hotel, sold the 13-story, 140-unit building at 440 West 41st Street between Ninth and 10th avenues for $17.5 million to a company owned by Israeli investors called U.S. Suite, a partnership of Israeli firms Aura Investments, Livorno Properties and U-Trend. Aura Investments is an Israel-based investment and management company. In addition to purchasing the hotel, the joint venture purchased an apartment building and commercial property on the Upper West Side.

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.