Highly-Leveraged Tel Aviv Investor Selling Stake in Prime Seacoast Project for $88 Million
Highly leveraged and under recent new leadership, Tel Aviv-based Electra Real Estate Ltd. (TASE: ELCRE) hopes to gross $88 million (NIS 350 million) from its stake in Sea One, one of Israel's most expensive hotel-apartment-retail projects.
That's the company's asking price in the 23-story Electra Tower. The seafront tower itself is currently valued at about NIS 1.5 billion ($377 million U.S.).
There are no takers so far, according to published reports of the pending sale. Electra Real Estate and Oranim Projects Ltd. own the project in equal shares. Electra Real Estate is a subsidiary of Georg Salkind-controlled Elco Holdings Ltd. (TASE: ELCO).
Globes, an Israel-based business publication, reports the move comes after Electra recently sold off properties in North America and Europe for hundreds of millions of shekels. The company also hired an international real estate agency to sell the company's share of the Electra Tower.
Globes reports that in January 2011, CEO Shlomo Sherf, who was responsible for the company's buying spree, left to join Azrieli Group Ltd. (TASE: AZRG), and was succeeded by Shai Weinberg. Weinberg has been dealing with the company's portfolio of highly leveraged properties, some of which have lost value due to the economic crisis.
Sea One is located at 42 Herbert Samuel Street. The project's hotel, called the Royal Beach is due to have 230 rooms, which Isrotel Ltd. (TASE: ISRO) will manage for 16 years, under an agreement signed in October 2010.
The last time a hotel was built along Tel Aviv's beach promenade was in 1991, according to Globes.
Sea One's apartments are among Israel's most expensive. Israeli billionaires Valery Kogan and Alexander Mashkevich recently bought penthouses for NIS 110 million ($27.6 million U.S.) and NIS 112 million ($28 million), respectively.
At the end of 2011, 49 of the project's 57 apartments were sold, almost all to foreign residents, for NIS 408 million ($102 million U.S.