Investors have spent a mere $131M this past year, a steep decline from $2.07B last year
Israeli investment in New York City declined precipitously last year according to a report by Ariel property realtors. The story as originally reported in the Real Deal.
Israeli investment declined to $130.5 million in 2016. This is a marked downturn from the $2.07 billion that Israelis had invested in 2015.
Overall investment declined from $48 billion to $67 billion in 2015. The APA report mentioned that Israeli investors had only been involved in 18 deals last year, as compared with 39 that went through in 2015.
APA president Shimon Shkury told the Commercial Observer that the cause of the downturn has been an overheated market. “Israeli investors, as well as developers here, really took a step back. There were fewer trades and less multifamily deals as compared to last year.
The report also reported a steep decline in the amount of development projects. In 2016 it was estimated that investors have only placed $112.5 million into 11 deals, representing a dramatic downturn from the $1.31 billion funneled into the 24 deals made in 2015. By contrast, Israelis invested a mere $18 million in seven multifamily deals last year, as compared to $353.7 million invested in 2015.
Since 2007, Israeli investors have funneled $5.74 billion into 225 commercial property transactions last year.
There is an inverted relationship established in the case of American firms. The amounts of American firms that have turned to Israel proper to secure funding have increased markedly. In particular, American real estate firms have gone to Israel in order to secure proper financing. The amount of debt accumulated by American companies investing in Israel has risen to $878.5 million in 2016. Most of this money came from the investment in bonds on the Tel Aviv stock exchange, although that number was also down from the $1.07 billion raised in 2015.
Despite the downturn, Shkury sees the tides rising in the future. He expects investments to be on an upswing in the future. “Israeli investors are careful and look for certainty, but they’re also opportunistic.”
According to the Real Deal, since the beginning of 2017, Yoel Goldman’s All American Management raised $58.3 million in a private bond offering to Israeli institutional investors. Israeli investors have also been involved in the acquisition of a Williamsburg loft building at 475 Kent Avenue for $56 million. The prospect of future investments is looking to be on the more and more likely in the coming years.
By: Kristina Stukalenko