Bank Leumi Eyes Sale of Manhattan Headquarters Building

Israeli bank seeks to unload rights to the two Midtown buildings in Manhattan that serve as its U.S. headquarters.

Bank Leumi is seeking to sell rights to the two Manhattan buildings that have served as its U.S. headquarters for decades, in a deal that could be worth as much as $100 million.

The bank revealed plans to sell the two buildings at 579 Fifth Avenue on the corner of 47th Street, in its second-quarter financial report, released a week ago. One of the two buildings is owned by the bank and the other is leased.

The building owned by Leumi was bought decades ago, when Manhattan real-estate prices were much lower, but a real-estate source in New York told TheMarker that selling the rights to the two could fetch between $85 million and $100 million in today's market.

According to the bank's report, a sale will be finalized by the end of 2015, market conditions permitting.

One of factors preventing a quicker sale is that one of the buildings has a large number of tenants, with whom Leumi will need to reach agreements regarding the date they have to vacate the premises.

The planned sale is part of a strategy to increase the bank's long-term profitability by focusing on core activities and increasing its operational efficiency, which Leumi says it began implementing toward the end of 2012.

The sale of the bank's prime U.S. real estate is seen as one measure to help increase operational efficiency.

Bank Leumi's U.S. headquarters. Leumi is one of three Israeli banks embroiled in tax-evasion cases in the U.S.
Bloomberg News