The Israeli bond market spigot has turned back on.
Rotem Rosen’s MRR Development secured $135 million from the Israeli bond market to refinance its Hotel Indigo on New York City’s Lower East Side and a development site in Miami.
MRR secured the financing at an interest rate of 6.2 percent, filings with the Tel Aviv Stock Exchange show. Investors in the raise included Phoenix Insurance and Meitav. The overall loan-to-value ratio is 55 percent, according to TASE filings.
Rosen and his partner Indian billionaire Anand Mahindra bought the Hotel Indigo at 171 Ludlow Street, home to popular rooftop bar Mr. Purple, in 2018. The pair also owns a development site in Miami’s Arts & Entertainment District neighborhood.
The developers secured $113 million in financing from the Israeli bond market in 2022 for the properties, but at a much lower interest rate of 4.5 percent.
A decade ago, U.S. real estate owners flocked to Israel’s debt market for cheaper financing. It also allowed developers the ability to obtain corporate-level debt. Notably, Yoel Goldman of All Year Holdings and Starwood raised hundreds of millions in raises from Israeli investors, including pension funds and insurance companies.
But Goldman and Starwood’s deals ended in high-profile defaults, leaving Israeli investors skittish about investing in U.S. real estate.
The Israeli bond market is still open to U.S. developers and has remained popular among those with connections to the country. PBC, owned by an Israeli parent company, tapped into the Israeli bond market to refinance 10 Bryant Park in 2024. Israeli developer Sade Real Estate secured financing earlier this month to purchase a luxury apartment complex in Houston’s River Oaks.
MRR’s new financing gives it more time to develop the Miami site. Rosen was under contract to acquire the site between 18th and 19th streets and Northeast Second Avenue and Northeast Second Court in 2018. The site, which includes the Price Choice supermarket and the Learning Nest preschool, finally closed in 2022. The Miami site allows for up to a 1.9 million mixed-use development.
Rosen’s former brother-in-law and past business partner, Alex Sapir, owns a massive development site about a block away that was recently relisted for sale at up to $50 million.
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