Columbia University (archives)
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Israelis to build apartments in NYC for $6.5M
Buyers group to construct eight-story building, 14 flats in Morningside project near Columbia University
After conquering popular areas in Israel,
the Israelis have begun implementing the buyers group concept abroad. A recently formed buyers group is planning to build an apartment building near Columbia University in New York City at a total investment of $6.5 million.
The group was organized by Eldad Levy, an Israeli businessman living in New York. Levy, one of the owners of the Centrock Group, has built a model similar to the one of Israeli buyers groups, which will provide the buyers in New York with legal protection.
The group bought the land, located on 116th Street and 8th Avenue at the entrance to the university, from an official receiver for $1.2 million. The land was purchased before the global financial crisis for $3.2 million.
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For example, a group member who stops funding the project will be dispossessed of his or her apartment and it will be sold to a different investor. In addition, the land has been purchased by a designated company founded specifically for the project. Each of the investors holds shares of the company and the ownership over the land.
The project will be managed by Levy, who has been elected as the group's representatives.
The project, named Morningside, includes an eight-story building with 14 apartments. So far, seven Israelis have bought 10 apartments in the project and the remaining four will be marketed to additional investors.
The apartments have two to four rooms. Investors are paying some $480,000 for a three-room apartment measuring 85 square meters (915 square feet) in size, and according to Levy its real price in the market is valued at $650,000.
The project is expected to be completed in about two years, and most Israelis bought the apartments for investment purposes. According to Levy, due to its proximity to the university, a three-room apartment in a similar location could be rented out for $3,000 a month, reflecting a return of 5 to 6%.
Levy says he chose to market the project to Israelis due to their familiarity with the concept of buyers groups. "Similar activity of buyer groups is almost nonexistent in New York," he noted.
