The Real Deal New York

Starwood Capital raises $290M in Tel Aviv

The bonds are backed by seven US shopping malls
By Dennis Lynch | February 28, 2018 08:30AM

Barry Sternlicht and the lobby at the Tel Aviv Stock Exchange (Credit: Flickr)

Starwood Capital Group’s retail investment arm has raised $290 million as part of a bond offering to institutional investors on the Tel Aviv Stock Exchange.

The bonds were backed by seven of Starwood Retail Partners’ 30 shopping mall properties stateside. They consisted of two in California, three in Ohio, one in Indiana, and one in Washington state, said Ori Eisenberg, whose firm, Barzell Global, advised on the offering.

Starwood Retail Partners is a division of Starwood Capital Group, the Connecticut-based fund manager headed by Barry Sternlicht.

News of the bond issuance was first reported in TheMarker, a Hebrew language businesss journal.

About 60 or 70 investors scooped up bonds, including the insurance firm Menorah Mivtachim Holdings, Meitav Dash Investments, and Phoenix.

Starwood will make its public tender early next week and looks to raise an additional $30 million to bring its total fundraising to $320 million, Eisenberg said. That would be higher than the $200 to $300 million Starwood initially sought to raise, he said.

The lead underwriters were Poalim IBI and Leumi.

American real estate firms raised $6.7 billion through bond offerings in Israel last year alone and the pipeline doesn’t appear to be drying up. WeWork has also shown interest in raising funds through the Tel Aviv stock exchange.