The Real Deal New York

Tabak’s Princeton Holdings to test Israeli bond market

Midtown-based investor targeting $80-100M debt issuance in Tel Aviv

April 14, 2016 04:50PM
By Rey Mashayekhi

Tel Aviv Stock Exchange

The Tel Aviv Stock Exchange (credit: Yaniv Morozovsky via Wikipedia)

Joe Tabak’s Princeton Holdings is set to become the latest New York City real estate player to test the Israeli bond market, with the landlord and developer seeking to raise up to $100 million through a public debt issuance on the Tel Aviv Stock Exchange.

Princeton, headquartered in the Seagram Building in Midtown, is targeting a bond offering between $80 million and $100 million that would be backed by a portfolio of real estate assets valued at roughly $300 million, sources with knowledge of the deal told The Real Deal.

The company would use proceeds from the deal to acquire new assets, as well as upgrade or redevelop existing properties and replace previous debt on assets. In the process, Princeton would become the latest New York-based firm to capitalize on Israel’s unique corporate bond market, which allows small-to-midsized real estate companies to issue bonds secured at relatively affordable interest rates as low as roughly 4 percent.

The offering would be backed by only a portion of Princeton’s total portfolio, which is valued at more than $1 billion, but would include four properties in Manhattan and the Bronx. In addition to its assets in New York, the company owns residential and commercial properties across the U.S., including in California and Texas.

Princeton did not return requests for comment. The company is being advised on the offering by Tel Aviv-based financial services firm and underwriter Leumi Partners and consultancy One Ha’am Capital.

Tabak and fellow investor Robert Wolf of Read Property Group recently sold a piece of the former Rheingold Brewery site in Bushwick to Brooklyn investor Yoel Goldman’s All Year Management for $72 million. Princeton and Read Property sold another, adjacent piece of the assemblage to All Year – another New York firm that has tapped the Israeli bond market – for $69 million last year.

In addition to investing in development sites like those recently sold to Goldman, Tabak has invested in commercial properties like the infamous Ring portfolio of Midtown South office buildings — which he subsequently flipped to Gary Barnett’s Extell Development.

Tabak started his firm in 1991. His brother, Eli Tabak, is a founding partner at Financial District-based real estate investment firm the Bluestone Group.