Migdal in huge US REIT deal

Doron Sapir photo: Eyal Izhar
Doron Sapir photo: Eyal Izhar

Israeli insurance company Migdal is paying $75 million for a stake in Forest City Realty Trust.

Migdal Insurance and Financial Holdings Ltd. (TASE: MGDL), managed by CEO Doron Sapir, is expanding its overseas real state investment portfolio. Sources inform "Globes" that Migdal recently took part in the acquisition of US real estate investment trust (REIT) Forest City Realty Trust. Migdal's share of the deal amounts to $75 million (NIS 280 million) - 2.3% of the $3.3 billion deal. Forest City's real estate is valued at $11.5 billion.

The Brookfield Asset Management fund, in which Migdal has invested, is leading the deal, together with co-invest partners, of which Migdal is one. Sources associated with Migdal said, "Forest City's diverse portfolio of properties contains a number of iconic properties located in extremely large and stable markets in the US, not in small cities." This accounts for the large amount directly invested by Migdal. Migdal head of investments is Asaf Shoham, while Jonathan Ross manages its real estate investments.

One of Israel's first investments institutions to enter real estate

Forest City's largest property is the New York Times Tower in central Manhattan. The fund's portfolio contains 585,000 square meters of office space, 214,000 square meters of life sciences space (laboratories, mainly occupied by academic institutions in Massachusetts), 204,000 square meters of commercial space, and 18,600 multi-family housing units. The portfolio also includes five large development projects in metropolitan New York, San Francisco, and Washington.

Like other large insurance companies, Migdal is making more and more alternative investments, including in Israeli and overseas real estate. Migdal was one of the first investment institutions to invest directly in real estate, early in the last decade. As far as is known, the current value of Migdal's overseas real estate portfolio is NIS 3.25 billion in capital terms, including the current deal.

The deal is another in a series by Migdal in the US in recent years, including the purchase of multi-family housing units in cooperation with LaSalle Investment Management and the purchase of an office building in New York with US real estate company ATCO.

Sources close to Migdal, controlled by Shlomo Eliahu, said that the deal was "an extraordinary opportunity to take part in the acquisition of a diverse and very high-quality real estate portfolio together with some of the world's leading real estate managers."

Published by Globes, Israel business news - en.globes.co.il - on January 31, 2019

© Copyright of Globes Publisher Itonut (1983) Ltd. 2018

Doron Sapir photo: Eyal Izhar
Doron Sapir photo: Eyal Izhar
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