It appears that a large portion of Miami real estate purchased five years ago during the boom is being sold at a loss to save Africa Israel Investments, an Israeli company that Uzbek-born billionaire Lev Leviev owns 75 percent of. Now, having lost $1.4 billion in a little over a year, Leviev announced that the company might have trouble paying off its worldwide debts and plans to restructure its loans. Since the declaration, the company’s shares have dropped by one-third and at the center of Africa Isreal’s portfolio are the Miami investments.
Africa Israel’s current debt equals $5.5 billion. In an effort to raise money, the company has been selling off its Miami real estate—but at a significant loss. Land on Brickell Avenue that once had an asking price of $3.5 million was sold to an Orthodox Jewish group for $750,000; land that was originally contracted to the Miami Worldcenter for $89 million, was practically given to them for only $39 million; and a Brickell office building was just sold for $33 million, about half of what Africa Israel paid for it in 2005.
This is all an effect from last years decline in the value of the company’s holdings. The then newly opened Marquis condo in downtown Miami lost $173 million of its initial value, and surrounding vacant lots went down in value by $69 million. Those Miami investments alone accounted for one-third of the write-downs in 2008.
Investors in Africa Israel, one of Israel’s largest companies, are worried, though Leviev remains cool. Israel’s central bank issued an announcement to assure those investors and the public that Africa Israel’s restructuring plans would not destabilize the nation.