The Real Deal New York

Lightstone raises $120M on Israeli bond market

David Lichtenstein’s firm follows path of Extell, Brookland

January 06, 2015 03:10PM
By E.B. Solomont

David Lichtenstein and the Tel Aviv Stock Exchange

David Lichtenstein and the Tel Aviv Stock Exchange

David Lichtenstein’s Lightstone Group raised $120 million on the Israeli bond market, joining other New York developers who have tapped the market to finance local building projects.

Lighstone Enterprises Limited, a subsidiary of Lightstone, issued the $120 million unsecured corporate bonds on the Tel Aviv Stock Exchange, where the bonds began trading Dec. 8, 2014.

Lightstone will use proceeds of the bond offering to fund future growth. “This is an important ongoing source of capital,” Lichtenstein said in a statement Tuesday.

In turning to the Israeli bond market, Lightstone is borrowing a page from the playbooks of Extell Development and Brookland Capital, which raised $271 million and $34.5 million, respectively, by selling Israeli bonds.

Cheaper borrowing costs and investor demand have led to an Israeli bond boom in recent months: Companies sold $14.6 billion in bonds through Nov. 20, 2014, compared with $8.7 billion in the same time period in 2013, according to Bloomberg News. Extell and Brookland, as well as Zarasai Group Ltd., which owns apartment buildings throughout New York, were among the U.S. real-estate developers to jump into the fray.

This past summer, Lightstone and Steve Witkoff’s Witkoff Group reportedly were mulling bond offerings of $141.6 million each, according to Israeli newspaper Haaretz. The Witkoff Group is not pursuing a bond offering, Steve Witkoff told The Real Deal in an email message Tuesday.

Lightstone has $2 billion of development projects in the pipeline, according to its website. Last month, it bought a 16-story building at 485 Seventh Avenue in the Garment District for $200 million. The developer reportedly plans to gut renovate the property or turn it into a hotel.

Meanwhile, Lighstone’s 700-unit development in Gowanus is progressing. The developer picked up a $120 million construction loan in October for a 12-story apartment complex 363-365 Bond Street.

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