NEW YORK, NY - Gaia Real Estate Company announced it has partnered with Harel Insurance Investments & Financial Services Ltd., one of Israel's largest insurance companies, to invest in residential real estate in the United States and the tri-state area. On the same day as Gaia announced the partnership, it also announced the acquisition of several hundred residential units in three separate deals: a 48-unit building on Manhattan's Upper West Side, steps away from Central Park, for $16.75 million; a 20-story 265-unit high rise in East Orange, New Jersey for $30 million and a 92-unit multi-family project in Colchester, Connecticut for $5.4 million.
"The partnership will give Gaia another financing option that will help us close deals faster and give us a competitive advantage and flexibility that is necessary in today's market for success," said Gaia Managing Partner Danny Fishman. He explained that all three properties will be rebranded under the Gaia name and managed by Vision Property Management – a full subsidiary of Gaia and a leading provider of property management services in the Tri-State area.
According to Fishman, Harel Insurance Investments & Financial Services Ltd will invest equity of up to 50% in Gaia deals along with other institutional investors and high net worth individuals. Harel will also provide Gaia with two credit lines – one for long term loans and the other for short term bridge loans to give Gaia the flexibility to buy all cash deals and later re-finance – a strong competitive advantage in today's market.
"Gaia enjoys a strong and high-quality deal flow and is working closely with banks, private equity funds, REITs and other property operators that want to liquidate their assets," added Amir Yerushalmi, Gaia's other managing partner, who also revealed that Gaia will soon close on two more transactions - - one that involves a large commercial building.
The Three Properties Acquired by Gaia and Harel Insurance Investments & Financial Services Ltd
Gaia by the Park (5 West 91st Street) - a fully occupied six-story elevator building encompassing 48 residential units and approximately 52,375 rentable square feet. The property was acquired for $16,750,000 million. Besides partnering on the building, Harel Insurance Investments & Financial Services Ltd also provided the financing for this deal.
The building, off Central Park West, benefits from an irreplaceable location in one of the city's premier rental submarkets and is walking distance to many of the city's most famous cultural landmarks, museums and restaurants. Constructed in 1974, it was the recent beneficiary of a significant capital improvement and unit upgrade program.
Gaia ParkView (320 South Harrison Street) - a 20 story high-rise building located in East Orange, New Jersey, encompasses 337,455 rentable square feet, 265 residential units and ground floor commercial space.
The property, designed by Morris Lapidus, the architect of the famed Fontainebleau Hotel in Miami Beach, was acquired for $30,000,000 million and is 97% leased. Amenities include a pool, fitness center, doorman service and valet parking. Many units have balconies and the upper floors offer Manhattan skyline views.
Substantial unit renovations and property-wide capital improvements will be undertaken, including the inclusion of more amenities and conversion of commercial space to residential units.
The property is located near the border of South Orange and one block from Orange Park, a mile and a half from Seton Hall University, within three miles of three area hospitals, and 15 miles from Midtown Manhattan (with an NJT station under one mile away providing direct rail access to New York's Penn Station in approximately 35 minutes). Furthermore, Gaia Park View is proximate to New Jersey's strong employer base of financial services and health care firms.
Gaia Gardens (38 Balaban Road) - a large multi-family property located in Colchester, Connecticut, consisting of 92 townhouse-style units (all two-bedroom, one bath and each approximately 1,000 SF) spread over seven buildings on an expansive 26.4 acres. The property was purchased for $5,400,000 million.
A local bank provided the financing for the deal. As part of its repositioning, Gaia will pursue substantial renovations and embark on a full rebranding of the property. An extensive capital program will be implemented, which will include the build-out of amenities such as a playground, basketball and volleyball courts, and other property-wide upgrades. Unit renovations will include new kitchens and baths, finished basements, and construction of decks/patios.
Colchester, located in New London County, is viewed as a desirable bedroom community for local employment centers such as Hartford, Middletown, Norwich, and New London/Groton. Additionally, the two largest casinos in the United States, Mohegan Sun and Foxwoods Resort Casino, are both within a short commute. The town was named by CNN in its special "100 Best Places to Live" and possesses a median household income well above statewide and national averages. Both property and sub-market occupancy have historically remained around 95%.
For all three purchases, Vision Property Management, a leading provider of property management services in the Tri-State area, will be retained to provide day-to-day administrative expertise and hands-on oversight of capital initiatives.
Gaia Real Estate is a U.S. real estate investment company with in-house integrated property management and brokerage capabilities. Gaia pursues a range of real estate investments in partnership with leading global insurance companies, pension funds, private equity funds, foundations, and high net worth individuals.
Gaia is a dynamic and creative full service real estate company with an opportunistic approach combined with an extensive, structured due diligence process and hands-on property management.
Gaia capitalizes on opportunity by investing in and operating income-producing real estate including multi-family rental properties, unsold condominium units, commercial office buildings, projects under distress, pre-completion and other distressed opportunities. Further, Gaia's focus is on "brick and mortar" assets, by acquiring title to real properties rather than investing in real estate-related securities or derivatives.
Gaia manages real estate properties through a wholly-owned subsidiary - Vision Property Management - and operates a real estate marketing and brokerage group - Park River Properties - that specializes in identifying and marketing condo bulk transactions.
Headquartered in New York with offices in Tel Aviv, Gaia has a team of 45 seasoned professionals who combined have over 100 years of experience in real estate investments, fund and public company management, as well as extensive financial expertise, all coupled with impressive asset and property management record. Members of the management team have substantial experience in successfully weathering difficult market cycles experience that will serve well in the current market
Harel Insurance Investments & Financial Services Ltd. is one of Israel's largest insurance and finance groups.
The Group provides comprehensive financial and insurance solutions, including: life insurance, general insurance, health insurance, provident, pension, mutual and index funds, investment portfolio management and other financial services (total AUM approx. NIS 62 billion).
With income of NIS 8 billion from premiums and management fees in 2008 (compared with NIS 7.2 billion in 2007) and a balance sheet of NIS 35 billion at the end of 2008 (compared with NIS 33.8 billion at the end of 2007), Harel is Israel's third-largest insurance group, with a market share of 18%.
The Group is Israel's largest in health insurance, second in the non-life insurance sector and third (in terms of premiums) in life insurance. Harel also has an 11% market share in the pension fund management market.
Source: Gaia Real Estate