Jeff Sutton looks to raise $100M in Israeli bonds

Issuance will be backed by 18 properties including 747 Madison

TRD New York /
Nov.November 30, 2016 01:50 PM

Jeff Sutton’s Wharton Properties is seeking to raise $100 million on the Tel Aviv Stock Exchange, according to a prospectus filed Wednesday.

This is Sutton’s TRData LogoTINY second attempt to raise money in Israel, after a failed effort at raising $500 million last year.  Sutton pulled out after investors balked at the conditions he was offering.

In the current version, Sutton is seeking a more modest $100 million. The funds will go toward further investment in the retail sector such as acquisitions of new properties or the financing of existing properties, according to the documents.

The entity issuing the bonds is backed by 18 of Wharton’s properties, primarily in Manhattan and Brooklyn, out of the company’s roughly 150 total retail properties in the New York area. The portfolio, valued at $710 million, includes several prime retail locations like 747 Madison Avenue, home to Givenchy and Alexander McQueen, Three 34th Street properties in Midtown, and seven Fulton Mall properties in Downtown Brooklyn.

The 10,200-square-foot Madison Avenue property is the highest profile, with a net operating income of $4.4 million for the first half of 2016 — $3.8 million of which is rent income. The property’s two tenants, both fashion-centric retail, have 15-year leases ending in 2028 and 2029 respectively and the average price per square foot is $948. The income from the second highest-profile property, 29 West 34th Street, home to Aldo and Geox, was just under half of 747 Madison, at $2.1 million for the first six months of 2016.

In contrast, the lowest-earning of the properties, the 4,000-square-foot building at 480-482 Fulton Street, home to Sneaker Point in Fulton Mall, had an NOI of $71,000 for the first half of 2016, and was valued at $18 million.

None of Wharton’s Fifth Avenue properties are included in the portfolio, as opposed to last year’s offering, which included 717 and 509 Fifth Avenue.

Wharton, a Manhattan retail giant, is one of several American companies raising bonds in Israel for the first time. Elad Group, a Midtown-based firm, filed a prospectus seeking to raise up to $60 million Wednesday, and the Dallas-based Southern Properties Capital, headed by Daniel Moos, filed earlier this month to raise up to $93 million. Namdar Realty Group, a Great Neck-based company focused on shopping centers, raised $118 million in an institutional tender Tuesday, out of a $140 million bond issue, after raising their ask from $112 due to high demand.

Sutton, who according to Forbes is worth $3.6 billion, is being advised by the financial consultants Rafael Lipa and Gal Amit. The issue is set to take place in early 2017, according to sources.


Related Articles

arrow_forward_ios
Alex Sapir and the Tel Aviv Stock Exchange (Sapir by Clint Spaulding/Patrick McMullan via Getty Images, Jack Guez/AFP)

Sapir Corp goes private as shareholders approve buyout

Sapir Corp goes private as shareholders approve buyout
Barry Sternlicht and (from top) Capital Mall in Washington, Franklin Park Mall in Ohio and Plaza West Covina Mall in California (Credit: Capital via Starwood, Franklin via OCP Contractors)

Competing bids for Starwood’s suffering retail

Competing bids for Starwood’s suffering retail
From left: Mapleton Rentals at at 1555-1575 61st Street in Mapleton, 1440 Story Avenue in Soundview, Beard-Van Brunt at 411 Van Brunt Street in Red Hook

Abraham Leser targets $74M refi for Brooklyn, Bronx properties

Abraham Leser targets $74M refi for Brooklyn, Bronx properties
Alex Sapir, CEO of the Sapir Organization (Credit: Getty; iStock)

Alex Sapir wants to take his firm private. This could be the right time

Alex Sapir wants to take his firm private. This could be the right time
Clockwise from top left: 871 Grand Street, 392 St. Marks Avenue, 607 Franklin Avenue and 600 Park Place in Brooklyn (Credit: Google Maps)

All Year’s $346M multifamily portfolio sale to David Werner falls apart

All Year’s $346M multifamily portfolio sale to David Werner falls apart
Gary Barnett, Central Park Tower, and the Tel Aviv Stock Exchange Bull (Credit: Wikipedia, iStock)

Extell’s Israeli bonds put on downgrade watch

Extell’s Israeli bonds put on downgrade watch
RCP CEO Richard O’Toole and Related CFO David Zussman (Credit: O’Toole via Westchester Magazine and Zussman via Related)

Related tries to calm Israeli investors after market panic

Related tries to calm Israeli investors after market panic
Related CEO Stephen Ross (Credit: Ross by Arturo Holmes/Getty Images; Wikipedia Commons)

Related’s Israeli bonds worry auditors as crisis worsens

Related’s Israeli bonds worry auditors as crisis worsens
arrow_forward_ios

The Deal's newsletters give you the latest scoops, fresh headlines, marketing data, and things to know within the industry.

Loading...