Starwood weighs buying back Israeli bonds as price tumbles

Bond price fell 42% since bonds were offered in March

Dec.December 11, 2018 01:30 PM

Parkway Plaza in El Cajon, California and Barry Sternlicht (Credit: Forbes)

The Israeli bond price of Starwood Capital Group’s debt on a portfolio of U.S. shopping centers has plummeted 42 percent since the bonds were offered in March, leading the firm to consider buying back the bonds.

The Tel Aviv bond market offers cheaper financing at better rates than in the U.S. While Israeli bonds issued by other real estate firms in the U.S. trade at yields between 2.8 percent and 5.9 percent, Starwood’s yield on the mall debt surged to 23.6 percent.

A Starwood unit raised about $244 million, or 910 million shekels, to refinance the portfolio of seven malls in March, according to the Wall Street Journal. The combined net operating income of the shopping centers fell 4.8 percent between January and September of this year, which Starwood attributed to rent cuts dealt to tenants to maintain occupancy.

The portfolio also includes five Sears stores, two of which are owned by Sears Holdings Corp. Sears filed for bankruptcy in October.

A Starwood spokesperson told the Journal that the Miami Beach and Greenwich, Connecticut-based firm is reviewing taking a buying position in the bonds, but that “any consideration of investing into these bonds requires a careful review of our fiduciary duties and additional approvals.” [WSJ] – Katherine Kallergis

Related Articles

Matt Rieger and a rendering of Paradise Lake Apartments

Developer scores financing for West Kendall affordable housing project

Wynwood 25 and Wynwood Annex with Jon Paul Perez and Jonathon Yormak (Credit: East End Capital/Related Group)

Related, East End score $136M refi of Wynwood projects

These real estate power players are involved in 2019’s juiciest lawsuits (Credit: Getty Images)

Here are South Florida’s juiciest lawsuits of 2019

From left: Suril Shah, Barry Sternlich, and 14501 Hotel Road (Credit: Hilton)

Former Starwood exec drops $22M for Hilton hotel in Miramar

Best of TRD 2019 promo

Coming soon: The Real Deal’s Best of 2019

2965 West Corporate Lakes Boulevard and Black Creek Group CEO Raj Dhanda (Credit: Google Maps, Blue Vault)

TIAA sells Weston warehouse for $33M

Madison Realty Capital'a Josh Zegen and Fort Partners' Nadim Ashi  

Four Seasons in Fort Lauderdale scores $210M loan

Daily Digest Miami

South Florida home sales struggle in October, Cipriani and Terra plan luxury condo