IBI recommends US companies in Tel Aviv

On average, companies yield 2.4% higher than government bonds

New York /
Oct.October 18, 2017 03:50 PM

IBI, an investment firm in Israel, gave a thumbs up to U.S. real estate companies trading on the Tel Aviv bond market, with a few caveats.

The company released a report Wednesday providing investors with guidance on the sector and recommended five companies in particular.

“This is an opportunity to make order and remind [investors] that not all American companies are of a piece,” IBI wrote in the document.

The five companies highlighted by IBI were the Moinian Group, Related Companies, Jeff Sutton’s Wharton Properties, the California-based KBS, and Lightstone Group. In terms of performance, all five have seen their yield spread trend downward relative to government bonds, demonstrating increased investor confidence in the firms over time.

Nevertheless, the yields remain higher than comparable Israeli companies, presenting an opportunity for investors to exploit. The report puts the average yield spread at 2.4 percent for the five American companies and 1.2 percent for comparable Israeli ones.

Wharton has the shortest track record, having entered the market in January. The Wharton portfolio is strictly retail but is protected from the retail slowdown by its prime locations and because it’s locked into long-term leases with built-in rent increases, according to the analysis.

Lightstone has made three substantial multifamily purchases outside New York in the last several months, which will increase its portfolio by 2,900 units for a total of $257 million, and thus its income flow is expected to increase substantially.

A slew of new U.S. companies have entered the market, at varying levels of quality, over the past few months, and the Tel Aviv Stock Exchange introduced an index to track them.


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
Israel Securities Authority chair Anat Guetta and Denizen Bushwick (Photos via Israel Securities Authority; Denizen Bushwick)

All Year fined by Israeli securities authorities, faces new scrutiny

All Year fined by Israeli securities authorities, faces new scrutiny
Denizen Bushwick at 123 Melrose Street in Brooklyn (Google Maps; iStock)

All Year misses Israeli bond payment, sending values plunging

All Year misses Israeli bond payment, sending values plunging
One Madison Avenue and Marc Holliday (Photos via SL Green)

SL Green snags $1.25B construction loan for One Madison Avenue

SL Green snags $1.25B construction loan for One Madison Avenue
11 Penn Plaza and 120 Wall Street (VNO, Wikipedia Commons)

Manhattan’s top real estate loans post second best month since March

Manhattan’s top real estate loans post second best month since March
Square Mile Capital CEO Craig Solomon and The Real Deal's Hiten Samtani

WATCH: “It’s going to take longer, and it’s going to cost more”: Craig Solomon on the real estate capital stack

WATCH: “It’s going to take longer, and it’s going to cost more”: Craig Solomon on the real estate capital stack
OneTitle's Seth Brown (iStock)

OneTitle set out to change the title industry. Now it’s out of business

OneTitle set out to change the title industry. Now it’s out of business
arrow_forward_ios

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

Loading...