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Israel leases nine floors to consolidate NY affairs.

Israel leases nine floors to consolidate NY affairs

The Government of Israel has signed a lease for 130,000 square feet of office space comprising nine full and contiguous floors at 800 Second Avenue in Manhattan.

As a result of the approximately $100 million transaction, Israel will consolidate virtually all of its New York City governmental operations into this one location. The move will result in the elimination of many duplicated services, improved efficiency, plus the saving of more than $11 million in rent over the course of the new 18-year lease.

The handsome 18-story, 280,000-square-foot grayish brick tower, which occupies the entire easterly blockfront between 42nd and 43rd Streets, is owned by a joint venture comprised of S L Green Real Estate, Sheldon Lowe, and a major pension fund. The building, which recently underwent an extensive modernization, including a new lobby entranceway and upgraded public areas, is now 100 percent rented.

As part of a phase-in consolidation that's expected to take about three years to complete, the Israeli Department of Defense will relocate from 850 Third Avenue and the Economic Mission and Ministry of Finance will move from the Empire Estate Building. The Consulate General of Israel and its United Nations Mission, which have been tenants at 800 Second Avenue for over a decade, will remain in its present offices which comprise about 30,000 square feet of space.

When each group is finally in place, the Government of Israel will occupy the entire tower of the building, with a private bank of elevators and their own lobby attendant to provide increased security.

The brokers who negotiated the multi-party complex transaction, over an 18-month period, were Gil Robinov, vice chairman and A. Mitti Liebersohn, executive vice president, of Riverbank Realty Company. Ben Feldman and Stephen Green of S L Green Real Estate, represented the building's ownership. The lease required approvals from government officers in both the United States and Israel and involved eight attorneys representing the various parties in New York.

The lease negotiations were essentially completed last September but it took another three months to satisfy the many concerns of the various ministries in Jerusalem. In addition, the different groups in New York, who were accustomed to operating independently, had to negotiate and sign a separate internal agreement.

The concept of Israel having its own headquarters in New York City to centralize its operations has been considered many times over the past 40 years, but one problem or another always hampered its feasibility.

The current weak real estate market, however, created the window of opportunity for the idea to be revived and the creativity of the S L Green organization, along with the willingness of the 800 Second Avenue ownership to offer important financial concessions, in the form of work, free rent and cash contributions, provided the plan with the support it needed to succeed this time.

A long and often tense meeting among various government officials took place in Jerusalem on Monday, Dec. 30. The consent to the lease was then finally received in New York on Tuesday, Dec. 31. On the last day of the year, the Government's real estate brokers, Robinov and Liebersohn, rounded up all the various parties in the conference room of the Mission at 800 Second Avenue, where both the lease and the internal agreement were signed.
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Copyright 1992, Gale Group. All rights reserved. Gale Group is a Thomson Corporation Company.

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Publication:Real Estate Weekly
Date:Jan 29, 1992
Words:556
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