Yitzhak Tshuva's Manhattan project gets a boost from Bank Leumi USA
Move contrasts Bank Leumi's write off of debt from magnate's Israeli company.
Yitzhak Tshuva's real estate prospects in the United States seem to be faring better compared to his recent fortune in the Israeli market. Bank Leumi USA has granted $61 million (NIS 230 million) in rolling credit to El Ad Group, the private North American real estate arm of the Israeli business magnate, several months after Bank Leumi wrote off nearly half the debt owed it by Tshuva's Israeli real estate firm, Delek Nadlan.
The credit line from Bank Leumi USA, which is owned by Israel's Bank Leumi, is going toward funding the long-stalled Franklin Place, a 20-story development in the TriBeCa area of Manhattan that will be able to hold up to 53 condominium units. Work is already underway and is slated for completion in 2014, according to Crain's New York Business, which covers business news in the city. The credit agreement was reached last year, when El Ad Group used some of the funds. It is now using the rest.
Sources familiar with the Franklin Place deal said this is a potentially lucrative project and that El Ad Group is in a strong financial position.
In contrast, Bank Leumi reached a debt rescheduling agreement with Yitzhak Tshuva several months ago on the debt of Delek Nadlan and that of its subsidiary, Delek Balron International. Under the deal, Delek Nadlan agreed to pay NIS 140 million of its debt by May, and Leumi has written off the remaining NIS 130 million. All the same, the bank is expected to see some recovery this year.
Back in New York, Crain's reported that El Ad Group, which purchased the 10,500-meter building project nearly two years ago for $44.8 million, has recently selected Eran Chen of ODA Architecture in Manhattan to complete the project.
Elad Tshuva, Yitzhak Tshuva's son, is responsible for the purchase and development of the Franklin Place project, though the development is earmarked as part of the El Ad Group portfolio and not one of Elad Tshuva's personal business deals.
Having underwritten funding for several real estate projects in New York over the last three years, including the IDB group purchase of HSBC headquarters and El Ad Group's purchase of the Plaza Hotel, due to regulatory restrictions and the risk of overexposure in the real estate market, Bank Leumi has become increasingly cautious and invests only in real estate ventures it considers low-risk.
El Ad is also working on another housing project in New York: the Riverside Center residential and commercial project on Manhattan's West Side, which it is developing along with Silverstein Properties in New York. They are seeking an estimated $600 million to $650 million in funding for a development that would include 662 apartments, 472 parking spaces and 5,580 meters of commercial space. Construction is expected to be completed by 2016.