Africa-Israel Investments Ltd. (TASE:AFIL) subsidiary AFI USA Inc. has completed the sale of nine floors in the old New York Times building in Manhattan for $160 million to Blackstone Group LP, after obtaining approval from the New York State Department of Law. AFI USA will report a pretax capital gain of $2 million on the sale.
AFI USA and Five Mile Capital Partners own the property in equal shares.
The sale reduces Africa-Israel's debt on the property to $186 million.
Africa-Israel still owns 22,000 square meters of retail space in the old New York Times building, after selling 32,000 square meters to Blackstone.
Africa-Israel, controlled by chairman Lev Leviev, bought the old New York Times building for $716 million in 2007, which was mostly financed with bank loans. In the wake of the US real estate crash, the building's value was cut by $500 million, causing Africa-Israel heavy losses. After violating the financial covenants of the loan, the company reached a debt settlement in late 2009 on the property, which resulted in a $370 million accounting gain.
AFI USA CEO Tamir Kazaz said, "The successful rezoning and debt reduction on the Times Square building, together with the repositioning of the building has enabled the company to maximize its value, as demand for office space in midtown Manhattan picks up."
Africa-Israel's share price rose 0.9% in morning trading today to NIS 21.90, giving a market cap of NIS 2.57 billion.
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