Israeli businessman and billionaire Idan Ofer is buying a New York office tower known as 845 Third Avenue for an estimated $350 million, with plans to convert it into a residential building in a bid to raise its value.
The 21-story tower, in Manhattan’s Midtown East neighborhood, spans about 350,000 square feet.
The purchase comes as excess office space in New York and other cities since the coronavirus pandemic, along with the shift to remote work, has accelerated efforts to convert office buildings into housing. New York City has encouraged such projects as a way to increase the supply of rental apartments.
For the investment, an $88 million bridge loan was taken from Bank Hapoalim USA. The financing will be used to convert the building from offices into rental housing with 529 apartments through Ofer’s real estate arm, Quantum Pacific Realty, and its partner Metro Loft, the firm of developer Nathan Berman.
This week, Forbes reported that Ofer is the richest Israeli in the world, with an estimated personal fortune of $34.6 billion, one of 43 Israeli billionaires on the list. He ranked 61st overall, up from 68th last year.
Metro Loft, founded in 1997 by Berman, is a longtime Manhattan developer specializing in office-to-residential conversions. The company has completed several large-scale projects, including 443 Greenwich Street, 20 Exchange Place and 63 Wall Street.
“New York is one of the most dynamic and significant real estate markets in the world. We see great importance in its continued development. Projects of this kind demonstrate the connection between the right partners, capital and a clear vision,” Gil Karni, chief executive of Bank Hapoalim USA, known as BHI, said in a statement.
Ofer’s Quantum group did not comment.