Property and Building Ltd. (TASE: PTBL) a subsidiary of Nochi Dankner-controlled IDB Holding Corp. Ltd. (TASE:IDBH) yesterday signed a deal to buy a commercial property in Chicago for $121.5 million. The property is being offered by Rock Real Partners Ltd., owned by Jack Schimmel.
In late 2009, IDB approved a parties at interest deal with Rock Real Partners to help it find real estate properties and close deals overseas, and to provide consultancy and building management and redevelopment services.
Schimmel's company receives 12% of profits from the sale of properties whose purchase he brokers. Jack Schimmel and his brother Mark own 10% of Ganden Investments Ltd., through which Dankner controls IDB.
Schimmel has already made a $4.4 million (NIS 17 million) profit on the revaluation of HSBC USA Inc.'s New York headquarters, the first deal that he brokered for IDB. In October 2009, Property & Building and its sister company Koor Industries Ltd. (TASE:KOR) bought the Fifth Avenue building for $330 million, not including related expenses.
In the second quarter of 2010, the two companies recognized an 18% rise in value on the property, on the basis of a valuation made in late June, only ten weeks after completing the purchase. Each of the two companies reported a NIS 72 million upward valuation on the property, on which Rock Real Partners made 12%.
The 95,000-square foot (8,800-square meter) Chicago building is full leased to two tenants. Rent totals $8.8 million a year, and will rise by an average of 3% a year. Property & Building expects to close the deal in February, with an option to extend, after conducting due diligence on the property.
Property & Building's share price rose 2.2% today to NIS 334.80, giving a market cap of NIS 2.06 billion.
Published by Globes [online], Israel business news - www.globes-online.com - on January 27, 2011
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