The President Hotel building in Jerusalem's prestigious Talbieh neighborhood was sold recently for NIS 310 million. The seller was A.V.N.R Even, which only bought the property in 2021 for NIS 82 million, and is now selling it for nearly four times the amount to Hadas Capital and Magshimim Group.
The President Hotel was developed by Haim Shiff in 1954 on a 5.3 dunam (5,300 square meters) lot on Ahad Ha'am Street near the corner with Keren Hayesod Street. The hotel was one of the first in Jerusalem to have a swimming pool, which became controversial when the rabbinate withdrew the hotels kashrut certificate for allowing mixed swimming. In 1988 the building was purchased by Africa Israel Residences (TASE: AFRE), and after more than 30 years in which the hotel was closed down for the most part, it was sold to A.V.N.R Even.
"This is a large deal, which expresses a vote of confidence in Jerusalem and its future development," says Nachum Rosenberger, one of the owners of A.V.N.R. Even. "There aren't many deals like this today. We decided to sell the complex in order to concentrate on our activities in the city center - our big project in the Davidka area covering almost 40 dunams (10 acres) and the Sabon lot covering 12 dunams (3 acres), each of which requires investment of major inputs."
"We are focusing most of our efforts within a radius of 2.5 kilometers from Independence Park and Machanei Yehuda market in the belief that this area is about to have a huge boom, mainly because of the extension of the light rail and the plan to build a new railway station. All of this will push Jerusalem forward and make it a very much more accessible place. The potential is infinite and in my opinion it will be unrecognizable within a decade."
In the sale A.V.N.R. Even was represented by Adv. Eli Mordechai of Wietelson, Mordechai and Adv. Dana Marciano of Meitar. Hadas Capital was represented by Advs. Asaf Eylon and Maytal Spivak of Arnon, Tadmor-Levy.
A.V.N.R. Even is jointly owned (50-50) by real estate developer Nachum Rosenberger and Osher Ad. After buying the building from Africa Israel Residences the company has worked to arrange land registration because it is on land owned by the Greek Orthodox Patriarchate, which is in the middle of the land leasing affair to Keren Kayemet Le-Israel (KKL) in Talbieh and Rehavia.
The lease from the Patriarchate is supposed to expire in 25 years, and this creates uncertainty, especially among apartment buyers, who do not know what the future ownership of the land will be. Although the church lands were purchased at the beginning of 2023 by Jewish-American businessman Gary Barnett, the matter has not yet been settled. At the time of the purchase in 2021, A.V.N.R Even were quick to settle the matter of registration, specifically regarding this complex, and therefore it does not currently face the same problem that buyers of apartments on other Patriarchate lands face.
The price at which the company sold the building is almost four times higher than the purchase price three years ago. This can be explained, among other things, by the large improvement potential of the land, which has major building rights and the option of changing rezoning. Africa Israel Residences itself tried to promote such a plan for the lot, which included the addition of housing and other uses, as well as increasing the building rights by 150%, from 4,850 square meters to 7,275 square meters. The plan was approved in 1994 but never implemented. The Jerusalem Municipality tried to revive it in 2018, but this attempt was also unsuccessful.
Rosenberger says the price reflects not only the potential of the land, but also its current quality. He explains, "The location and the land are very special in my opinion. This is a rare piece of land. There are almost no such places in Jerusalem today. Indeed, the place has great potential for change and upgrading, and it can be done in several directions and not just for housing and hotels. In any case, the land is in an area that will always be in demand, for almost any purpose."
Published by Globes, Israel business news - en.globes.co.il - on February 7, 2024.
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