Starwood weighs buying back Israeli bonds as price tumbles

Bond price fell 42% since bonds were offered in March

TRD 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
Rendering of Sailboat Bend II

Affordable housing project in downtown Fort Lauderdale lands $27M loan

Rendering of the Brickell hotel development, Tony Cho and Robert Finvarb

Finvarb and Cho land construction loan for mixed-use hotel near Brickell City Centre

State report finds open gas valve fueled building explosion at Plantation shopping center

State report finds open gas valve fueled building explosion at Plantation shopping center

Bayside Marketplace is planning another high-rise entertainment venue with a view

Bayside Marketplace is planning another high-rise entertainment venue with a view

Construction of downtown Hollywood high-rise may start soon

Construction of downtown Hollywood high-rise may start soon

South Florida firm, partner acquire Tampa office building for $29.4M

South Florida firm, partner acquire Tampa office building for $29.4M

Developer borrows $105M, breaks ground for mixed-use Flagler Village project

Developer borrows $105M, breaks ground for mixed-use Flagler Village project

Moishe Mana plans mixed-use project with logistics theme next to airport in Panama

Moishe Mana plans mixed-use project with logistics theme next to airport in Panama

arrow_forward_ios