Delshah raises $52M in Tel Aviv for $250M Morningside Heights project

Firm plans to convert five-building complex into 205 upscale rentals

TRD New York /
Aug.August 10, 2017 02:25 PM

Israeli road show veteran Micheal Shah raised $52 million in a bond issuance on the Tel Aviv Stock Exchange to finance a $250 million redevelopment project in Morningside Heights. The total falls short of Shah’s $63 million offer, and carries a fixed interest rate of 6.15 percent, the maximum allowed under the terms of the offer.

Shah planned to finance the project — which would convert a five-building complex at 30 Morningside Drive to high-end rentals — with a combination of a roughly $130 million construction loan, $70 million in bonds raised in Tel Aviv, and $50 million from capital sources, including EB-5 money, according to a bondholder presentation.

His company, Delshah Capital, purchased the complex for $102 million in 2014, also with funds raised in Tel Aviv. He plans to convert it to 205 high-end rentals.

Unlike previous bonds, Shah’s offer gives the bondholders membership interest in the entity that owns 30 Morningside, putting them in the second position in the capital stack. Up to $30 million in excess EB-5 money would serve as a cushion for paying back the bond money, Shah said. Delshah thus far has raised $12.5 million in Eb-5 funds, out of a possible $50 million, Shah said.

The real estate firm previously had about $120 million in the Israeli bond market and Shah’s first substantial payment, of close to $22 million, is due in 2021. Delshah has 14 properties in its portfolio at a value of $623 million, according to the rating company Midroog. The rating company put the Delshah’s loan-to-value ratio at 40 percent and loan-to-capital ratio at 50 percent, which will rise to up to 61 percent once the financing for the Morningside Heights project is included.

The company recently closed on a $28 million loan from Cantor Commercial Real Estate to refinance two properties in New York, at 69 Gansevoort and 58-60 Ninth Avenue. The five-year loan carries a 4.25 percent interest rate.

In May of 2016 The Real Deal published a detailed feature that shows how U.S. real estate players raise money on the Tel Aviv Stock Exchange.


Related Articles

arrow_forward_ios
With a cooling trade war, stocks perform well, including real estate. (Credit: iStock)

Real estate stocks push up this week as U.S.-China trade tensions ease

Real estate stocks push up this week as U.S.-China trade tensions ease
416 West 25th Street and Maverick Real Estate Partners principal David Aviram (Credit: Google Maps and LinkedIn)

Chelsea landlord claims “predatory” lender is charging a crippling interest rate as punishment after losing foreclosure case

Chelsea landlord claims “predatory” lender is charging a crippling interest rate as punishment after losing foreclosure case
Nightingale’s Eli Schwartz and 111 Wall Street (Credit: Google Maps)

Nightingale, Wafra seek $860M to redevelop 111 Wall Street

Nightingale, Wafra seek $860M to redevelop 111 Wall Street
(iStock)

Banks see CRE loans delinquencies hit 5-year high

Banks see CRE loans delinquencies hit 5-year high
Clockwise from left: 950 University Avenue in the Bronx, 27-55 Jackson Avenue in Queens, 149 Pioneer Street in Red Hook and 416 Metropolitan Avenue in Williamsburg (Google Maps)

EB-5 investor snags Hunters Point resi development: Mid-market sales report

EB-5 investor snags Hunters Point resi development: Mid-market sales report
30-77 Vernon Boulevard in Queens and Cape Advisors CEO Craig Wood (left) and 720 West End Avenue in Manhattan with Brack Capital Real Estate CEO Ariel Podrojski (right) (Images via Cape Advisors; Google Maps; LinkedIn)

The biggest loans of the slowest month: August’s real estate lending

The biggest loans of the slowest month: August’s real estate lending
Tel Aviv Stock Exchange bull (Wikimedia Commons)

NYC developers face downgrades on Israeli bond market

NYC developers face downgrades on Israeli bond market
Port Authority Bus Terminal and AECOM CEO Troy Rudd (Roger Rowlett via Wikipedia; AECOM)

“Worst place on earth” may be buried underground

“Worst place on earth” may be buried underground
arrow_forward_ios

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

Loading...