Electra Real Estate raises second US fund

Daniel and Michael Salkind

Electra Real Estate reports commitments totaling $460 million for a second fund investing in residential clusters in the US.

Electra Real Estate (TASE: ELCRE) continues to develop its residential cluster development business in the US. Yesterday, the company reported that it had completed the raising of a second fund for investment in this field, with the receipt of investment commitments totaling $460 million.

This comes year after the company, part of the Elco group controlled by brothers Daniel and Michael (Mikey) Salkind, reported the first closing of commitments to invest in the fund amounting to $140 million.

Electra Real Estate's share price responded to the news by rising strongly, making it a rise of nearly 70% in the past year to a current market cap of some NIS 900 million. Nevertheless, the share price is still about 80% short of the peak it reached in May 2007.

Electra Real Estate said yesterday that among the investors in its two funds are IBI, Bank Leumi, Hachshara Insurance, pension fund Gilad, universities, and kibbutzim, alongside private investors who invested some NIS 1 billion.

The company said that the second fund owns 37 residential clusters in the south-eastern US amounting to some 12,600 housing units at a capital investment of $392 million. The fund has also signed binding purchase agreements on a further 1,100 housing units, which will bring its holdings to 40 clusters with 13,700 units at an investment of $413 million. Electra Real Estate carries out its business in the US through its wholly-owned subsidiary Electra America.

"The company's share alongside its partners in the fund's capital will be $30 million," Electra Real Estate said, adding that Electra America was setting up an additional $500 million fund to provide loans to developers of residential clusters."

Besides the finance raised in Israel, US investors have invested some $400 million alongside the fund in the acquired assets. Electra Real estate's investment in the two funds amounts to over $60 million, and it manages all the funds' assets.

Published by Globes, Israel business news - en.globes.co.il - on July 8, 2019

© Copyright of Globes Publisher Itonut (1983) Ltd. 2019

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Daniel and Michael Salkind
Daniel and Michael Salkind
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