Starwood weighs buying back Israeli bonds as price tumbles

Bond price fell 42% since bonds were offered in March

National /
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

arrow_forward_ios
Robert Finvarb and Abraham “Abie” Hidary with the site at 2534 North Miami Avenue (Koniver Stern Group)
Hidrock Properties, Robert Finvarb pay $13M for Wynwood site
Hidrock Properties, Robert Finvarb pay $13M for Wynwood site
The current Miami Beach North Shore library with Mayor Dan Gelber (Google Maps, Gelber)
Miami Beach seeks buyers for city-owned development sites
Miami Beach seeks buyers for city-owned development sites
Developer David Edelstein and Robert Levine of RAL Development with the project (Getty, RAL)
David Edelstein, partner close on missing piece of Wynwood assemblage for office towers
David Edelstein, partner close on missing piece of Wynwood assemblage for office towers
David Grutman and Pharrell’s Goodtime Hotel had received nearly 30 noise violations (Carma Connected, Getty)
Too much of a good time? David Grutman and Pharrell’s Goodtime Hotel could lose entertainment permit
Too much of a good time? David Grutman and Pharrell’s Goodtime Hotel could lose entertainment permit
Related Companies Chairman Stephen Ross with One Flagler (Related, Getty)
Prayers answered? Related Companies closes on church site for planned office tower in downtown West Palm
Prayers answered? Related Companies closes on church site for planned office tower in downtown West Palm
Grover Corlew principal Mark Corlew with Bank of America Tower in Boca Raton (Grover Corlew)
Grover Corlew buys Bank of America Tower in Boca Raton for $45M
Grover Corlew buys Bank of America Tower in Boca Raton for $45M
The partially collapsed 12-story Champlain Towers South condo building (Getty)
Inside the tug-of-war over the Surfside condo site’s future
Inside the tug-of-war over the Surfside condo site’s future
Moishe Mana and the downtown parking lot he purchased (Google Maps, Getty)
Moishe Mana expands downtown Miami assemblage with $12M purchase
Moishe Mana expands downtown Miami assemblage with $12M purchase
arrow_forward_ios

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

Loading...