Joel Schwartz raises $85M in Tel Aviv IPO

$21M to go toward purchase of four East Williamsburg buildings
By Chava Gourarie | September 05, 2017 11:46AM

From top: 125 Borinquen Place and 105-107 Vanderveer Street
(Credit: De-Jan Lu Architects and Google Maps)

Joel Schwartz raised $85 million in his first bond issuance on the Tel Aviv Stock Exchange on Monday, at a 6.75 percent interest rate.

Schwartz upped the offer from $80 million to $100 million to meet investor appetite, and will seek to raise the remaining $15 million in a public tender.

The bond was issued by Schwartz’s recently incorporated company, Noble Assets, and is backed by a portfolio of 27 multifamily properties in Brooklyn, with 305 units and another 225 units in development. The portfolio is valued at $326 million, with an annual NOI of $9.5 million and contains a mix of market-rate and 421a units.

The Israeli rating agency rated Noble with a BBB+ rating, citing the low valuation and NOI, which is expected to rise with the delivery of 10 additional projects by 2018. On the positive side, the properties are 97 percent occupied, and while the portfolio lacks diversification, the only sector in which it operates — the Brooklyn multifamily sector — is stable.

Of the funds raised, $55 million will be used to repay existing loans, and $21 million to close on the purchase of four buildings in East Williamsburg that are currently under contract, according to documents filed on the Tel Aviv Stock Exchange.

Victory Consulting, led by Rafi Lipa and Gal Amit, advised Schwartz on the deal. Earlier this month, it was reported that Victory will partner with Erez Goldschmidt, the former CEO of underwriting firm Poalim IBI, to form an in-house underwriting firm.