Menorah, Migdal buy Times Square office building

The Israeli insurers were joined by
private real estate investment firm Harbor Group International.

13 December 10 16:47, Globes, Michal Margalit

Two Israeli insurance companies - Migdal Insurance and Financial Holdings Ltd. (TASE: MGDL), Menorah Mivtachim Holdings Ltd. (TASE: MORA) - along with US-Israeli private equity fund Harbor Group International LLC have bought a 24-storey office building at 1412 Broadway, near New York's Times Square, for $150 million. Migdal will own 33% of the property, Menorah 32%, and Harbor Group 35%.

The 38,500-square meter building is leased to several tenants and is 85% occupied. Leases range from small offices to whole floors. The seller, Murray Hill Properties LLC, bought the building in 2006 for $177 million. The buyers plan to invest an additional $10 million in capital and tenant improvements.

Leases for 35% of the space will expire over the next five years, giving the new owners a chance to renew leases at higher prices. Talks are underway to lease two floors to a new tenant. Tenants include fashion giants such as Jones New York and Escada.

Harbor Group chairman and CEO Jordan Slone said, "1412 Broadway presented an excellent opportunity to acquire a core office building in Manhattan’s Times Square submarket. With little commercial development expected in the immediate future, the building will continue to appeal to a wide range of tenants and benefit from positive rental rate trends in a rapidly improving New York office market."

In January, Harbor Group bought 4 New York Plaza in downtown Manhattan from JPMorgan Chase for $107 million. Major tenants include the former owner, JPMorgan Chase, and the New York Daily News.

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