A loan provided by Israeli institutional bodies for the establishment of a luxury residential project in Manhattan, generated a cumulative profit of approximately NIS 150 million. This is as part of a deal led by the Northwind Group, which focuses on providing loans in the real estate sector in the US. Three prominent institutional entities participated with Northwind in providing the loan – the investment houses the best andYelin torches and the insurance company Menorah Mivathim. The loan was secured by a first-degree mortgage on the property.
The loan was granted in April 2022 for the purpose of converting an office building that was previously used as the historic headquarters of the Gucci fashion brand in New York. The building located at Fifth Avenue and 54th Street in Manhattan was converted into a project of 65 luxury apartments, called “Mandarin Oriental Residence”. The minimum price of the apartment in the project is 2.5 million dollars, and the price of the penthouse, which has already been sold, has reached 20 million dollars. The property includes, among other things, a pool, a gym, a spa and a private restaurant for residents of Michelin-starred chef Daniel Boloud.
The project itself, whose construction cost was estimated at approximately $350 million, was led by the real estate developer Michael Shavu in cooperation with institutional investors from Germany, including the largest pension fund in this country, who invested in the project equity capital of over $200 million. In the commercial part of the property are located brand stores The “Tag Heuer” watches next to other luxury stores.
Since the institutions and Northwind provided the financing to the project’s promoters, its construction has been completed and 15 apartments have been sold, leading to the repayment of approximately NIS 220 million of the loan amount. The balance of the loan was recently repaid, yielding Northwind and the institutions a yield of tens of percent and a net IRR of 12.7%. As part of the repayment of the loan, Northwind provided new financing to developers on a smaller scale, backed by its first mortgage on the 50 apartments remaining for sale in the project.
Nir Tuaf, director of the real estate department at Meitav, told Globes that “We identified the field of loans against real estate encumbrances as very attractive in the last two years when the interest rate environment increased. During this period, Meitav made a large number of loans that provided colleagues with high double-digit returns at a relatively low risk.”
Northwind Group is a real estate investment company in the USA that was founded in 2008 by Ran Eliasaf and is managed with his partners Tal Michelson and Jonathan Slasher. To date, the group has made transactions totaling $3 billion, while the debt fund it established to finance projects The credit facility is in the total amount of 850 million dollars. Northwind offices are located in New York and in the state of Ohio. Nearly 70% of the group’s transactions are done in New York, with the majority of the debt fund transactions being made for the provision of loans for the construction of residential buildings.
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