It is unclear if those highly anticipated, absolute rock-bottom prices on commercial real estate in the U.S. are upon us yet, but for at least one foreign investor, the time is just right to snag a piece of a premier New York City office property. Mazal 485 L.L.C., a joint venture involving Herzliya, Israel-based Optibase Ltd. and Gilmore USA L.L.C., has committed to acquiring 49.5 percent of the 900,000-square-foot office tower at 485 Lexington Avenue in Midtown Manhattan from a subsidiary of SL Green Realty Corp.

Originally developed in 1956, 485 Lexington came under SL Green's possession in 2004 when the REIT, New York City's largest office landlord, acquired it from TIAA-CREF for $225 million and immediately commenced a $90 million capital repositioning program. Today the 32-story structure is 96.8 percent leased to a bevy of credit-worthy tenants including Citibank N.A. and Travelers Indemnity Company, which, together, occupy half the space.

The sale-purchase agreement, which carries an implied cap rate of 6.25 percent, assigns 485 Lexington an asset value of $504.2 million, including the $450 million of existing non-recourse mortgage financing serviced by Wachovia Bank; the debt will remain outstanding. Mazal 485 L.L.C. will take ownership of nearly half of Green 485 JV L.L.C., the entity designated as owner of 485 Lexington, in exchange for providing SL Green with approximately $20.8 million, as well as a loan of $20 million. The loan is secured by SL Green's pledge to provide the Optibase-led Mazal 485 partnership with the option to acquire an additional 49.5 percent of the building, which would leave SL Green with a 1 percent stake in the property ownership entity Green 485 JV.

Real estate services firm Cushman & Wakefield represented SL Green in the transaction, while the Carlton Group stood in for Mazal 485.

Israel's Optibase is new to the real estate game; the company's investment in 485 Lexington marks its entrée into the fixed-income real estate sector in North America. While the company is a novice in the business, its move is in line with the current sentiment of the usual suspects in the foreign real estate investment community. Participants in a survey released in June by the Association of Foreign Investors in Real Estate anticipated that their investments in the U.S. real estate market for the remainder of 2009 will "substantially out-strip investments completed year-to-date." Additionally, the respondents intimated that the office sector would likely be the first to recover, as opposed to the multi-family sector, which respondents in AFIRE's January survey anticipated would be the first to bounce back.