The Real Deal New York

KBS filing details REIT’s plans for Israeli bond issuance

Calif.-based company looking to raise between $100M to $150M on Tel Aviv Stock Exchange

February 11, 2016 02:20PM

KBS 110 William Street

From left: Peter Bren and 110 William Street in the Financial District

KBS Strategic Opportunity REIT filed a public draft prospectus with the Israel Securities Authority, detailing the company’s bid to become the first American real estate investment trust to tap Israeli’s burgeoning corporate bond market.

The public, non-traded REIT, which is managed by Newport Beach, Calif.-based KBS Capital Advisors, is seeking to raise between $100 million and $150 million through an offering of Series A bonds on the Tel Aviv Stock Exchange.

A portfolio of 20 properties – holding 47 buildings spanning 4.74 million rentable square feet – would back the issuance, according to CoStar. The portfolio’s holdings are valued at $1.5 billion in total.

The largest asset backing the issuance is KBS’s 110 William Street office building in the Financial District. The company values the 32-story, 928,000-square-foot property at $405.7 million.

KBS owns a 60 percent stake in 110 William Street through a joint venture with real estate investment firm Savanna. The two companies acquired the office tower from Swig Equities and the Dubai Investment Group for $261 million in 2014.

The REIT also owns a majority stake in a 66-unit rental building at 424 Bedford Avenue in South Williamsburg.

KBS Strategic Opportunity REIT would become the first U.S. REIT to issue bonds on Israel’s increasingly popular bond market, as The Real Deal reported in December. New York real estate firms, in particular, have looked to the Tel Aviv Stock Exchange as a means of accessing affordable, corporate-grade debt.

Most recently, developer Michael Shah’s Delshah Capital raised more than $102 million through a bond offering in Israel that closed last month, as TRD reported. [CoStar]Rey Mashayekhi

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