Summit News

LeFrak reaches to London for bank and property

NEW YORK (Reuters) - New York City real estate developer and investor Richard LeFrak is extending his reach to London, buying a piece of the country’s first new High Street bank in over a century and negotiating a deal for a multifamily property.

LeFrak, chief executive officer of the LeFrak Organization, said at the Reuters Global Real Estate and Infrastructure Summit in New York that now is a good time to invest in property in London.

The British pound has fallen, London is “the best city in Europe,” and there is a shortage of housing, he said. “You can actually get a title policy that says you own it, instead of most places you go around the world.”

In addition, London is a difficult place to develop new properties, meaning it has a limited amount of supply that is the cornerstone of successful development, he said.

LeFrak Organization, best known for its apartment building developments in the New York area, also has a 10 percent stake in London’s newest bank, Metro Bank, he said.

Metro Bank is one of several new players trying to break into the retail banking sector in the UK and is the first to have received a license from the Financial Services Authority there.

LeFrak, who invested in the bank alongside Commerce Bank founder Vernon Hill, said the newcomer plans to open 12 branches by the end of next year and 200 over time. The first two branches are due to open this month.

Metro Bank plans to compete with retailers for the best spots on High Street -- the primary business streets of cities in the UK -- and will be open seven days a week from 8 a.m. to 8 p.m., even offering biscuits for dogs.

LeFrak has invested in other banks in the United States and was part of a group that last year bought a stake in a portfolio of loans and assets from failed Corus Bank, which was seized by regulators in September 2009. He also invested in Florida-based BankUnited, which was also seized by the Federal Deposit Insurance Corp.

LeFrak Organization is looking at other multifamily transactions in Los Angeles, where the company already has investments, and in the Pacific Northwest, LeFrak said.

Reporting by Caroline Humer; editing by John Wallace