Leviev pays $200M for another city jewel.

Africa-Israel's sweep of Manhattan trophies continued at breakneck pace this week as the global real estate company owned by diamond billionaire, Lev Leviev, paid $200 million for the iconic Madison Avenue clock tower.

The company plans to convert the former office tower to luxury condos, possibly with a hotel component, according to Rotem Rosen, chief executive officer of Africa-Israel's US operations, who hinted that more high profile acquisitions are imminent as the firm executes its previously announced strategy to expand and diversify its investments in the US. "Mr Leviev promises and he delivers," said Rosen. "He plans to spend more money in New York and in the US. He believes very much in New York and the trophy buildings of the city and we are looking for other opportunities."

In the past three months, Africa-Israel has been on a veritable spending spree-throughout the US. In New York City alone, the company paid $426 million for the luxury Apthorp rental building in March and then dropped $525 million for the New York Times building on West 43rd. Sales at its newest luxury condo, The District, at 111 Fulton Street--a former office building it bought a year ago--begin next week and it is developing a 140-acre Hard Rock theme park in Myrtle Beach, SC. The company also purchased six acres of development land in Phoenix, AZ, and dipped its toe in the South America market with the purchase of a trophy office tower in the heart of Buenos Aires, which it also intends to convert to condos.

The firm has been active overseas as well, purchasing properties in Germany, Bulgaria, Romania, Czechoslovakia and Russia in recent months as well as developing a residential complex in Israel, where its extensive holdings include a shopping mall.

Africa-Israel also owns several residential buildings in New York originally bought in partnership with developer, Shaya Boymelgreen. When that partnership dissolved, the two divided their US properties with Leviev keeping the Manhattan buildings and Boymelgreen retaining ownership in the Miami properties.

Its purchase of the Clock Tower came following rumors of a rift among the partnership of previous owners, Aby Rosen's RFR Holding company and hotelier, Ian Schrager, who purchased a majority stake in the building last year with plans to convert it into luxury residences and a hotel.

Tenants were emptied and the 41-story building's internal space and systems were separated from the abutting office building from which it juts. But work never appeared to get started on the conversion itself, even though Schrager had said last year that the tower would likely be ready for occupancy by the end of 2007.

The partnership between Rosen and Schrager had acquired a 60% stake in the tower not long after SL Green purchased 1 Madison Avenue from MetLife in 2005 for nearly $1 billion. The property, which occupies the entire block between 23rd and 24th Streets and Madison Avenue and Park Avenue South, was divided into the stout 1.2 million s/f office property that comprises most of the block and the 267,000 s/f clock tower.

CSFB was also given an ownership stake in the clock tower in exchange for providing SL Green with flexible financing for its acquisition of the larger property.

When news of an impending sale first surfaced, Andrew Mathias, president and chief investment officer of SL Green, said the partners had "decided to evaluate our options. There's a big appetite for this type of product."

Sources say Africa-Israel's voracious appetite prompted a pre-emptive bid for the tower ahead of several other interested parties.

Rosen himself said the company was thrilled with its latest acquisition. "We believe that New York is very much undervalued in comparison with other financial cities like London.

"To build something like the Clock Tower today for the price we paid would be impossible. We will convert it to very high end condos, which will have spectacular views of the [Madison Square] park and I think the building will attract people who want to live in a luxurious home in a legendary building in one of the best locations in the city."

Leviev's adhesion to a condo conversion plan for the tower comes at a time when there is evidence of a shift among developers about the formerly surefire wisdom of converting even obsolete buildings for residential use amid a soaring office market.

Acrosss Madison Park, plans to turn 200 Fifth Avenue into luxury condos were scrapped by L&L Acquisitions in favor of maintaining the building as an office property. L&L bought the 800,000 s/f property in recent weeks from investor Joe Chetrit for $500 million.

But Rosen indicated that the Clock Tower's prime location and landmark status made it an ideal property for conversion nonetheless.

"Africa-Israel believes in the market. There are a lot of companies with capital, but Mr Leviev is a real entrepreneur that sees things other people don't see. This building is unique in its design and location and we plan to turn it into one of the most sought after addresses in the city."

In the past, Africa-Israel has retained the services of such designers as Andres Escobar and nightlife impresario, Amy Sacco, who was brought on board for the 111 Fulton project.

Rosen said the company would be looking at all of the options for the Clock Tower conversion, including the possibility of a condo-hotel.

Whichever plan is followed, though, Rosen said buyers could be assured they were getting the best. "Mr Leviev built a world-wide [diamond] brand and everyone knows that when they buy from Leviev, they are getting the best. Our buildings are no different."

The largest producer of diamonds behind De Beers, the Leviev Group reports annual revenue in excess of $2.5 billion. Africa-Israel Investments is the third-largest publicly traded corporation in Israel.

CB Richard Ellis, which brokered the building's original sale to SL Green, handled the sale of the clock tower to Africa-Israel Investments.