Adam America keeps its lending worldly

Dvir Cohen Hoshen and Omri Sachs, the founders of Adam America, have development pedigrees in places as far-flung as Romania, Moldova, Ukraine and Turkey. So it may come as no surprise that when they look to raise debt for their Brooklyn projects, lenders from all over take notice. In fact, banks based outside of New York are involved in financing the lion’s share of Adam America’s projects, an analysis of city property records by The Real Deal found.

For example, Bank Hapoalim, Israel’s largest bank, lent $8 million to Adam America for the project at 781 Metropolitan Avenue, an 81-unit rental project in Williamsburg designed by Isaac & Stern. In the same neighborhood, Bank Leumi, another major Israeli bank, financed the developer’s 169-unit rental at 247 North 7th Street, contributing nearly $35.5 million. In total, Adam America has raised in excess of $80 million from Bank Leumi for three of its Brooklyn residential projects. The firm has been involved in the development or planned development of more than 1,500 residential units in Brooklyn since 2011.

Other lenders on Adam America projects include the now-defunct Puerto Rican Doral Bank, the French bank Natixis, Spanish bank Santander and Arkansas-based Bank of the Ozarks.

Sachs pointed out that Adam America’s lenders aren’t exactly foreign entities. Rather, they are subsidiaries or local offices of foreign banks that have a longstanding presence in New York.

“We’re talking about U.S. licensed banks, the fact that they’re subsidiaries of foreign banks is the same as if you went and got a loan from HSBC, but in the US––it’s a foreign bank,” Sachs said in an interview with TRD. “We’re working through local mortgage brokers like the Meridians of the world and JLL, and they bring us the banks, so it’s not that we go out and look for foreign banks- not at all.”

And connecting with foreign and out-of-state banks is quite common, said Abe Bergman, managing partner of commercial mortgage brokerage Eastern Union Funding.

“It’s not uncommon, not at all,” Bergman told TRD. “Some developers do, some don’t,” he said, adding that “not all banks based in New York City are doing construction loans,” and emphasizing that large numbers of outside lenders are eager to put up money for a very secure investment in New York real estate.

Sachs did mention, however, that in the case of the loans from Bank Leumi and Bank Hapoalim, Adam America approached the banks directly, as both he and Hoshen had connections in Israel through their previous development work. Hoshen was the founder of Adama Holding Public Ltd., a development firm that built more than 1,700 units in Romania, while Sachs oversaw Adama’s partnerships with institutional investors and private equity transactions.

Meanwhile, as TRD has reported, New York developers have been turning to the Israeli bond market, raising nearly $800 million for New York projects. Gary Barnett’s Extell Development raised $271 million on the Tel Aviv Stock Exchange, and other major developers such as David Lichtenstein’s Lightstone Group and Abraham Leser’s Leser Group raised $120 million and $150 million respectively. Brookland Capital, a relatively smaller but extremely active Brooklyn developer, has also tapped into the Israeli bond market for funds.

When asked if foreign-based banks offer preferential rates, Sachs said “the Wells Fargos of the world would offer far better rates, [but] I think that we as a firm are in a place where we are not yet the large, well-known developers.”

“We don’t have a track record of 20 years in the US, so I think it’s just [about] developing your relationships,” he added.

It may not take two decades for the firm to get more face time with those banks, however. A separate TRD analysis of Department of Buildings permit applications found that Adam America is Brooklyn’s most active residential developer by number of projects, based on projects with more than 20 units launched since 2009. Since 2011 alone, the developer has been involved in at least 18 projects, often in partnership with Slate Property Group. That activity appears to put them ahead of other major players in the borough, such as Simon Dushinsky’s Rabsky Group and Two Trees Management.

“We are meeting now with Wells Fargo and Bank of America,” Sachs said, “and we will probably do a deal with them one of these days.”