Tishman triples profit on $525m Times building sale.

Tishman Speyer is celebrating another record pay day after selling the New York Times Building at 229 West 43rd Street for $525 million--three times the amount it paid for the building in 2004.

Israeli investment firm, Africa Israel, has bought the 750,000 s/f, 15-story building and plans to pump another $170 million into renovations aimed at attracting high-paying tenants to the block once the Gray Lady moves into its state-of-the-art new building around the corner on 42nd Street at Eighth Avenue later this year.

It is the third hefty profit pocketed by Tishman in as many months. In January, Kushner Companies paid a record-breaking $1.8 billion for 666 Fifth Avenue, a building Tishman bought for $540 million in 2000. Last month, Tishman made another sweet deal when Metropolitan Real Estate Investors paid $607 million for The Lipstick Building at 885 Third, which Tishman bought for $235 million in 2004.

While there's no doubt the company has been following a well-planned strategy, market watchers say there's also an element of good luck involved as the price tags all three buildings have achieved illustrates the remarkable appreciation of New York City property in the past three years. "Hindsight is a great thing," said Weiser Group executive managing director, Deborah Jackson. "But the building wasn't necessarily undervalued when the New York Times sold it to Tishman. There are probably a number of sellers from that period who wish they had held onto their properties for a few more years."

When Tishman originally bought the building, the sale price raised few eyebrows as other similar properties were selling at prices within the same $200 psf range. The Bankers Trust Building sold for $188 psf; the Equitable Building at 120 Broadway went for $145 psf.

Driven by spiraling office rents and a weak dollar attracting foreign investment as well as an influx of institutional capital, prices had risen to around $800 psf by 2006 for buildings similar to the Times home. 340 Madison was sold at $744 psf and 220 West 42nd Street which went for $913 psf.

At $682 psf, Jackson said Tishman is indeed making a nice profit from it's latest sale, but the buyer certainly isn't overpaying as average prices for midtown are currently hovering around $895 psf. And while the building is in need of extensive renovations to attract corporate tenants, it's location in the vacancy-starved midtown market makes it a potential goldmine for Africa Israel, with financial firms in particular on course to drive rents well beyond the $100 psf being averaged for Class-A office space in midtown during the last quarter.

The purchase is Africa Israel's biggest US investment to date and its second recent Manhattan headline grabber. In March, the global real estate company owned by Lev Leviev bought the luxury Aphthorp rental building on the Upper West Side for $426 million.

Last month is also bought properties in Germany, Bulgaria, Romania, Czechoslovakia and Russia and it is currently involved in a residential development in Israel where its extensive holdings include a shopping mall.

Following its purchase of the Aphthorp last month, Rotem Rosen, CEO of American Operations, stated, "The new management at Africa Israel, led by president Erez Meltzer, will continue to expand its investments in the US market, specifically in New York, as part of Mr Lev Leviev's agenda."