Related, GFI look to raise capital on Israeli stock exchange

Companies follow Extell, Brookland to Tel Aviv

From left: Stephen Ross, the Tel Aviv stock Exchange and Allan Gross
From left: Stephen Ross, the Tel Aviv stock Exchange and Allan Gross

Following the footsteps of Extell Development and Brookland Capital, the Related Companies and GFI Capital Resources Group are the latest U.S. firms to tap the Israeli bond markets as a source of capital.

The two development firms, helmed by Stephen Ross and Allen Gross, respectively, issued draft prospectuses last month seeking to raise a sum estimated to be more than $200 million on the Tel Aviv stock exchange, Israel Real Estate News first reported.

While Related’s prospectus did not reveal a dollar figure, the publication said previous reports indicated the company would look to raise roughly $113 million through “a Virgin Islands unit called Related Commercial, which controls seven residential and commercial properties in New York, one under development. The completed properties are 95% to 100% occupied and valued at about $800 million.”

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GFI was looking to raise $100 million through a Virgin Islands entity that owns 19 commercial, residential and office properties the firm valued at $220 million, according to Israel REN.

Another U.S. developer, Michael Stern’s JDS Development Group, was also preparing a prospectus looking to raise roughly $40 million to $55 million.

“U.S. developers are turning to an unlikely place like Israel to sell debt because interest rates are low and capital is readily available,” Israel REN said. “The Israeli market is accessible to ordinary companies – those not structured as real estate investment trusts, or REITs – that want to raise relatively small amounts of debt from the public.”

Last summer Extell and Brookland raised a combined $305.5 million through on bond offering on the Tel Aviv exchange, the first time U.S.-based developers went to the Israeli market seeking funding for domestic projects, as The Real Deal reported. [Israel REN] — Rich Bockmann

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