Buy American is seemingly the buzzword among Israeli investors when it comes to real estate. They are now counted as the fourth biggest investor- amazing when the size of the country is taken into account. It has also helped that a number US developers and real estate owners have approached the Tel Aviv Stock Exchange for Israeli institutional funding. The money is then invested in the United States via bond offerings. About one billion US dollars' worth of such bonds were issued from 2008.
Better control over investments
A majority of such Israeli investors are putting money directly into real estate. This provides investors greater control over the failures or successes of such investment. It also places the investors quite closer to actual real estate assets when compared to procuring bonds at Tel Aviv Stock Exchange. Majority of such investors are into the production of real estate assets like retail and office spaces. To give an example, Israeli investors have snapped up properties like New York's Brill building. Halman Aldubi purchased it for about $310 million. The Psagot Investment House has purchased Texas and Atlanta portfolios by paying $182 million. About $167 million was paid for a North Carolina portfolio. The list of other deals include the partnership between the pension funds of Amitim, Silverstein, Psagot and Menora. The companies came together to acquire about $400 million worth of multifamily portfolios scatter across the United States. The Chetrit Group and JDS Development took a mezzanine loan amounting to $52 million from the Kushner family and Harel Insurance.
Israeli institutional investors are enticed by low interest rates. The reduction of the longer term issuance of government bonds have pushed them to seek a range of alternative investment options. The median exposure of such investors comes to about seven percent of the managed funds to the alternative assets. A lion's share of such investments is diverted to real estate. The success has enthused even small sized institutional investors to allocate a larger percentage of the funds towards real estate.
Israeli money is now increasingly being invested into real estate projects in the United States. Most money are from institutional investors. Developers and owners are finding Israeli capital to be an excellent alternative financing source. With the investors continuing to gain knowledge, they will become valuable partners and contribute to the longer term successes of such projects.