How to raise money in Israel: A developer’s guide A step-by-step look at what it takes to issue bonds in Tel Aviv, a la Barnett, Related and others
TRD Special Report: Boaz Gilad remembers first meeting Gal Amit and Rafael Lipa around 2008, when the U.S. economy was on its knees and Gilad’s firm, Brookland Capital, “didn’t have money to buy a cup of coffee” much less finance the sort of ground-up projects that have since made it one of Brooklyn’s busiest condominium developers.
At the time, Amit and Lipa were working with Brooklyn real estate investor Abraham Leser on an unprecedented deal: taking him to Israel, where a new entity holding some of Leser’s New York properties would issue publicly-traded bonds on the Tel Aviv Stock Exchange (TASE).
“To their credit, they kept in touch with us,” Gilad said of Amit and Lipa. In 2014, with local real estate values catching up to their pre-recession peaks, Brookland went to them to do an Israeli bond deal of their own, raising roughly $35 million.
On the same day, Extell Development’s Gary Barnett raised about $300 million through a bond offering backed by the firm’s enviable portfolio of Manhattan properties. A lot more people started paying attention to the land of milk, honey, and now, capital.
For small-to-mid-sized players, the Israeli bond market allows them to raise corporate-grade debt that they couldn’t score back home. For the bigger firms, it’s a way to do it at a healthy discount to what domestic lenders would offer on mezzan[……]