A group of Israeli investors recently took advantage of the COVID-19 crisis to purchase a tower in Manhattan at a 60% discount.
A group of investors, which includes Yellowstone (trust for the family of the Real estate investor Yakir Gabay), Phoenix, Mor Investments, and Clal recently completed the transaction in the United States. In this deal, the investors bought a large office building called the Kendler Tower, which is in the Times Square complex in Manhattan 220, located adjacent to the Adam Tussauds Museum and between 7th and 8th Avenue.
Yellowstone currently thrives on collecting properties in dire straits in the US. The investment group is a collaborative effort to invest in buildings in New York, Boston, San Francisco, Seattle, Houston, and New Jersey.
Thriving in COVID-19 Markets
The Kendler Tower suffered during the COVID-19 pandemic. A lot of tenants and a cash flow crisis meant that while the building was initially valued at $300 million for a $150 million loan, provided by M@T Bank in 2017, investors were able to purchase it for 40% of its original value – the investment group paid $120 million for the loan.
As well as successfully completing the Kendler Tower deal, Yellowstone and its investment partners made a deal in the early stages of 2021, where the group purchased the Watson Hotel for $175 million. The hotel, located on 57th street of Billionaires Avenue, was one of the biggest hotel deals in New York since the COVID-19 pandemic broke out.
The previous owner of Watson Hotel failed to make sufficient loan repayments, and HSBC sold the loan at a considerable discount. In addition to purchasing the loan, Yellowstone and its partners negotiated a deal with the land and building owners to have the ownership of the building transferred to Yellowstone at 60% of the pre-coronavirus price.
What is Kendler Tower?
Kendler Tower, named after Asa Candler of Coca-Cola, reaches 24 floors in height and encompasses an area of 21,000 square meters. Initially the headquarters of the Coca-Cola Company in 1914, the building passed from one giant to the next before being leased to Mcdonald’s.
The British Investment Company EPIC purchased the building in 2012, and M@T Bank granted a building loan in 2017. The building loan serves to refinance a previous loan offered by the German financial entity known as Landesbank Baden-Wurttember.
The deal marks the advent of more Israeli entrepreneurs looking to invest in American real estate. Summit Real Estate, and Miki Naftali are prime examples. While the real estate market continues to recover from the COVID-19 pandemic, there are deals to be done. Keen investment groups are quick to spot opportunities and purchase a building or plot of land for a discounted price.