Danny Fishman has lots of patience. The New York real estate is only just beginning, perhaps, to show signs of recovery, but he already sees the exit five years hence. Fishman, one of the owners of investment house Tamir Fishman, set up Gaia Real Estate a year ago with his partners: expat Israeli Amir Yerushalmi and US real estate investor Ken Woolley. The company now has 30 employees, and deals in buying and managing apartment buildings in New York, New Jersey, and Connecticut.
"I don't invest in holes. I invest in New York, the prime location in the universe," says Fishman. "There are many assets in the US that Israelis try to sell for $20,000 per apartment, with a return of 21% or more. These assets are in areas where, when night falls, you wouldn't want to wander around even with a Golani escort."
One aspect of Fishman's activities is buying whole residential complexes and renting out the apartments, and eventually selling the whole site as an income producing asset; another aspect is buying rental properties and converting them into condominiums, apartments for sale. In addition, Gaia puts together purchaser groups for buying clusters of apartments, chiefly from developers that have got into financial difficulties.
What advantage does an Israeli bring to New York?
"Israeli real estate has reached a peak; real estate n the US, after four years of declines, has reached bottom. For the same price that you put down in Israel to receive an apartment in four years time, you buy a ready apartment here.
"Transparency in the US is also a thousand times what it is in Israel. The transparency and the prices appeal to people. On the Internet, you can obtain information from past years about rents and purchase prices, crime levels, and more it's all public information. Furthermore, apart from 10% of the purchase price, the developer receives the money only when the apartment is handed over.
"At any rate, Gaia Real Estate's only Israeli connection is that I'm on the Tel Aviv-New York route. That's the sole connection. The company is American, and I spend a quarter of my time in New York.
"There's a big opportunity in the US residential market. There are about 309 million Americans, the population is growing at a rate of about 1% a year, and the housing stock is falling because contractors aren't building. This is the safest market there is. I'm about to buy a building with 290 apartments and with 98% occupancy. I'm buying at $90 per square foot, and for the time being have a 10% return from rents. Two to five years from now, I'll sell the apartments for $200 per square foot, at least."
When do you think you will realize assets?
"There will still be lots of buying opportunities in the next couple of years, because the banks are unloading assets and forcing developers who fail to meet loan repayment terms to sell projects. In my view, Manhattan has already reached bottom, but real estate isn't stocks, it won't take off in a month. We have no pressure to sell, you have to sit patiently. And I have lots of patience."
Published by Globes [online], Israel business news - www.globes-online.com - on June 13, 2010
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