Bank Leumi is selling off the two buildings comprising its New York headquarters to a U.S.-Israeli consortium, which includes the owners of fashion company Jordache Enterprises.
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The Nakash Brothers – Joe, Ralph and Avi – who control the fashion company Jordache Enterprises, have joined with a U.S. investment company to acquire two buildings that comprise Bank Leumi's New York headquarters, at a cost of about $100 million.
Jordache sibling owners Joe, Ralph and Avi Nakash and a U.S. investment company agreed to pay $100 million for the building, which is located on the corner of Fifth Avenue and 47th Street. The Nakash brothers plan to turn the two buildings into a retail outlet for their lines of jeans and other apparel.
Because of the complications involved in the sale, it is not clear what kind of gain the bank will record from the sale. One of the two buildings was bought outright by the bank decades ago at a very low price while the second building is leased by Leumi under a long-term contract.
In its last quarterly financial report a the end of August, Leumi made it known it was selling the headquarters and that it was in talks with a number of unidentified parties to sell the rights to the two buildings. However, in contrast to the sale of real estate assets in Israel, where the bank has earned some NIS 2.4 billion, in the United States Leumi expects to earn only a small gain.
The bank's aim in divesting itself of the buildings is less to earn a profit than to reduce operating costs by moving management of its U.S. unit out of some of Manhattan's most expensive real estate.
The Nakash brothers. who went in 50-50 with the investment firm, have yet to line up financing for the purchase. Some of the cost will likely be financed from their own capital and the rest with loans from U.S. and/or Israeli banks.
The Nakash brothers' businesses are estimated to be valued at about $2.1 billion, including a growing portfolio of real estate holdings and hotels in the United States and Israel. Their Israeli properties are controlled through Ampa Real Estate and other companies. They also control Arkia Airlines and have invested in high-tech.
Last year, they acquired the right to manage Eilat Port for NIS 120 million. Among their most high-profile real estate acquisitions was the Ocean Drive mansion in Miami Beach from the estate of the late Italian designer Gianni Versace. They bought the property last month for $41.5 million, outbidding U.S. real estate magnate Donald Trump.