Optibase Ltd., the Herzliya-based developer of technology for compression and digital video over the internet, said that it entered into a joint venture on August 7, 2009 to acquire 49.5% of the beneficial interest in the office building located at 485 Lexington Avenue in Manhattan from a subsidiary of SL Green Realty Corp.

"Following the decision to diversify our business and enter the fixed income real estate sector we believe the current transaction is the right business opportunity for us to execute on this decision," said Tom Wyler, Chief Executive Officer of Optibase. "We are excited about this particular transaction being our entry point into the fixed-income real estate sector in North America and we believe our shareholders would benefit from this in the long run."

Nasdaq-listed Optibase and Gilmor USA LLC, an unrelated party, are each equal partners in the joint venture through Mazal 485 LLC.

The purchase price for the transaction is approximately $20,790,000 together with a loan of approximately $20,000,000 from the joint venture secured by a pledge of an additional 49.5% interest in Green 485 JV LLC, with the subsidiary of SL Green Realty Corp. retaining an unencumbered 1% interest in Green 485 JV LLC.

485 Lexington Avenue has over 900,000 square feet of leasable area and more than half of that space is occupied by Citibank N.A. and Travelers Indemnity Company.

485 Lexington Avenue has existing nonrecourse mortgage financing in the principal amount of $450,000,000 serviced by Wachovia Bank. The transactions above are subject to certain conditions including the lender's approval of the transfer of ownership in Green 485 JV LLC and the lender's approval of substitute guarantors under the loan.

Mazal 485 LLC was represented in the transaction by Howard L. Michaels, Chairman of the Carlton Group.