About a month ago, Rotem Rosen, the C.E.O. of Africa Israel U.S.A., the real-estate venture led by billionaire Lev Leviev, met with executives from Tishman Speyer. At the meeting, their first, they discussed the ramshackle ex-home of The New York Times at 229 West 43rd Street that Tishman Speyer had just put on the market.
By the time their meeting ended, it was agreed that Mr. Leviev would pay $525 million for the building, three times what Tishman Speyer had paid for it in 2004. The auction for the building should have lasted months; this meeting ended the process in under a week.
In a similar, furiously quick fashion, Mr. Leviev bought the iconic 41-story Clock Tower on Madison Avenue for $200 million one month ago. The pre-emptive buy was also the way Haim Revah purchased the Lipstick Building in April and investor Uzi Ben-Abraham went to contract at 530-4 and 536-8 Broadway for over $1,100 per square foot last month.
The sales have a lot in common: They were purchased lightning fast; they were headline-grabbing deals; they were all purchased by Israelis
Manhattan is flush in foreign money, and brokers like to point to the Middle East—by way of Dubai—as the recent leader. But if there’s a dominating foreign investor in a year that is paced to become the most lucrative in the city’s commercial history, it is distinctly Israeli.
“I can tell you that this is only the beginning,” said Mr. Rosen. “This is one of the best places to invest. We believe this is the right time and the right place.”
In the last four months, Israelis have outpaced all foreign investors, with buys totaling more than $2 billion.
“They have the capital to spend and Manhattan is their playground,” said Dan Fasulo, a director at Real Capital Analytics, a market-research group. “They’ve been able to generate tremendous returns over the last few years.”
ISRAELI FOOTMARKS HAVE BEEN all over the city for years, of course.
Shaya Boymelgreen is an active player with holdings in Manhattan and Brooklyn, and recently sold 14 Wall Street; El-Ad Properties purchased the Plaza in 2004 for $675 million; and Ofer Yardeni’s Stonehenge Properties owns the Ritz and developed the high-end residential building the Olivia.
And that’s just to name a few. But there’s something a little different about 2007.
“Israelis used to come in as private investors and did more financing,” Mr. Yardeni told The Observer. “Today, they are able to create companies where they are buying directly.”
In other words, they’re buying more actively than ever before. This year a lot of money has been spent by only a few investors.
Mr. Leviev, born in Uzbekistan and a resident in Israel, has been the most active Israeli investor this year. In March, Mr. Leviev, who was once a partner with Mr. Boymelgreen, set a record for the most paid per apartment when he purchased the illustrious Upper West Side apartment building, the Apthorp, for $426 million.
It was only a little over a month later when he went to contract on the Times Building and the Clock Tower at 5 Madison Avenue.
“By far, we’re the largest investors of Israelis in the United States in any means or terms,” said a boastful Mr. Rosen.
“Mr. Leviev believes very much in the trophies in New York,” continued Mr. Rosen. “The prices in New York are very much undervalued. If you compare New York to London or to Moscow, you find the prices in New York are at a real discount. Buying these buildings makes a lot of sense in our eyes.”
It makes sense to others, too.
Mr. Abraham, the co-founder of the clothing store Scoop, spent $190 million on 530-4 and 536-8 Broadway, according to a source close to the deal (the building also includes a Scoop store).
Mr. Abraham would not comment on that deal for this story, but confirmed that he was Israeli. The two connected buildings at the corner of Broadway and Spring total 170,000 square feet, putting the building sale at more than $1,100 per square foot, a new record for Soho.
Mr. Revah, the buyer of the Lipstick Building and 292 Madison Avenue this year, could not be reached for comment because he was traveling, said Robert Franco, the vice president of Metropolitan Real Estate Investors, Mr. Revah’s firm. Mr. Franco confirmed that Mr. Revah was born in Morocco, but also said that Mr. Revah describes himself as Israeli.
IN REAL-ESTATE CIRCLES, A POPULAR question for all foreign investors is whether they’re longtime city investors or whether they’re here to buy and cash out. Dubai’s Istithmar, for instance, has sold real-estate holdings at 280 Park Avenue and 230 Park Avenue this year, raising suspicions that the sheikhdom’s ruling family, which controls the firm, may soon leave the city altogether.
Mr. Yardeni, who has been in the city for 21 years, believes recent Israeli investors might have short visits.
“Their expectation is to sell in the next two or three years,” said Mr. Yardeni. “If you look at Israeli investments in the last decade, they are not long-term operations like Tishman Speyer.
“If you’re thinking they’re dynasties for the next 150 years, I don’t think this is—in my mind—accurate,” he said later.
But Mr. Rosen insists that the Times Building and the Clock Tower are not short-term investments. Mr. Rosen said the fact the company bought what are essentially two empty buildings—both of which need to be renovated—is evidence of Africa Israel U.S.A.’s commitment.
“Most people look at us and ask why we’re buying empty buildings when those are harder to finance,” he said. “We do not look in the eyes of traditional investors. When we have an opportunity, we will grab it no matter what.”
He said Africa Israel will follow plans laid out by former owners SL Green, Aby Rosen and Ian Schrager, and convert the Clock Tower to residential units.
He also said that offers for their new properties have stormed in, but insists that Mr. Leviev will expand his city portfolio, not contract it.
“Mr. Leviev will continue to invest here very heavily and expand more and more and more,” he said. “We are not short-term investors. It’s very important that everybody should know we are not day traders. We are long-term investors and looking for opportunities to buy to make us stronger and stronger in this market.”
If they stay, will they also go the way of Tishman Speyer or other famous real-estate moguls and raise kids into the family business?
Mr. Rosen said he would not comment on Mr. Leviev’s private life, but said that the billionaire had nine children, some of whom are already in the real-estate business.
Mr. Yardeni, the longtime Israeli property owner, said he has three children, and hopes they all get into the business. If they do, they’ll stay right here and buy into the city.
“I’m a firm believer in Manhattan,” he said. “I think that prices are only going to increase. This is the goldmine. This is the best place in the world.”
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