By Ariel Rosenberg, Globes
Apartment sales by Israeli developers in New York have ground to a complete halt, according to a study by “Globes” on sales data by two leading Israeli developers in the city – Lev Leviev and Shaya Boymelgreen. The financial report for 2007 Africa-Israel Investments Ltd., controlled by chairman Leviev, published in March 2008, included an impressive Big Apple property portfolio; jewels in the company’s crowns. That financial report now appears to have been swan songs.
The largest project of Africa-Israel’s and Boymelgreen Developers’ joint venture, Leviev-Boymelgreen, is 20 Pine Street, in Manhattan. The 38-story building in the heart of the financial district was bought in late 2004. Leviev-Boymelgreen planned to convert the building, occupied by Chase Manhattan Bank into 408 condominiums for financiers, especially singles and young couples, who wanted to live adjacent to their jobs. Four years later, when Leviev and Boymelgreen dissolved their partnership, they divided up its properties. However, whereas 319 apartments in the project were sold by the end of 2007, only five were sold during the first quarter of 2008, the last figures that Africa-Israel provided in its financial reports.
Since then, the developers have not been able to move the remaining 20% of the apartments in the project, nearly three years after beginning the marketing in January 2006. According to “Street Easy,” 58 apartments at 20 Pine Street were still unsold by July 2008, just before the financial meltdown, and currently there is no demand at all. Although five contracts are being negotiated, the process has already lasted seven months.
The situation is even worse for Africa-Israel’s project at 111 Fulton Street, Manhattan, held through Africa-Israel Properties Development USA. In the financial report for the second quarter, Africa-Israel reported that it had sold 87 of the 163 condominiums in this project, 11 of which were sold during the first quarter, since beginning marketing in May 2007. However, “Street Easy” reports that, since April, no sales have been made at all, and some condominiums have been taken off the market. 24 condominiums have been waiting for buyers for months to no avail.
The asking price at another Africa-Israel project, known as the “District,” at 60 Ann Street in Lower Manhattan, has dropped to $11,850 per square meter. Condominiums in this project are now going for $625,000 to $3.4 million, but there have been no buyers since the beginning of the year.
Boymelgreen also has problems across the East River. Boymelgreen Developers’ Novo project at 343 Fourth Avenue in Park Slope, Brooklyn, has 113 apartments on 12 floors. Boymelgreen bought the lot in 2002, and obtained an occupancy license for the project in June 2008. The license infuriated local residents, because he did not meet his promise to renovate a nearby park used by the building’s residents.
The most recent sales in the Novo project were a month ago, and most of the apartments have been sold – but at substantial discounts on the original asking prices. Nine apartments are now being offered for between $499,000 and $905,000, but most were sold at a discount of 5-10% for an average price of $7,350 per square meter. Some apartments have been on the market for over a year. The price for a top-floor apartment was reduced from $1.05 million in June to $920,000 in August, but has still not yet found a buyer.
Boymelgreen also has a large Israeli portfolio held through Boymelgreen Capital Ltd. subsidiary Azorim Investment, Development and Construction Ltd.