Mid-market law firm Akerman has bolstered its real estate finance practice with the hiring of a trio of lawyers in New York. Yariv Ben-Ari, Andrew Berman, and Lisa Lim come to Akerman as senior partners. The three attorneys focus on financings, commercial leasing, and development in the real estate sector. Ben-Ari comes to the firm from Morrison Cohen, where he was a senior counsel. Berman comes to Akerman from the faculty of New York Law School, where he is still an adjunct professor. Lim is a former senior counsel at economic development agency Empire State Development.
In a discussion with IFLR1000, Ben-Ari described how his practice has evolved from a focus on securities and corporate governance to a focus on real estate investments. Ben-Ari began practicing law in 1999 in Israel, working for the conglomerate Gaon Holdings, and transferred his practice to the U.S. in 2003. Since then, Ben-Ari has seen many clients enter the U.S. market with an interest in real estate, and has also had clients who have moved in the other direction, making investments in Israel’s booming commercial real estate sector.
“Currently, my practice is split 50/50 between working with domestic U.S. clients and working with overseas clients, particularly from Israel,” Ben-Ari said. “Over the last year, I’d say a large majority of it has been inbound U.S. work. However, because the Israeli bond market is hot right now, I have seen a lot of work going to Israel.”
At the moment, Ben-Ari said he is working closely with numerous clients considering bond offerings in Israel. He has observed a trend of U.S. developers and operators of multi-family properties and income-producing assets using the Israeli capital markets to raise funds, and then come back and invest in stateside deals. In such instances, Ben-Ari’s role is to act as a liaison between the U.S. party issuing debt in Israel, and the rating agencies, underwriters, auditors, and advisors. In essence, Ben-Ari coordinates between U.S. assets being put to work to underwrite the bond offerings, and all the professionals based abroad.
“It’s an increasingly active area, with a lot of work going overseas,” Ben-Ari noted. “I’m also seeing LP investments coming in from Israel. Investments used to be typically in New York, but I’m seeing a lot of Israeli investors investing throughout the U.S., as well as a construction company that has decided to grow operations in the U.S. and work in the U.S. as a contractor,” added Ben-Ari.
Ben-Ari described the bond market as highly popular for U.S. developers and operators seeking to raise capital for U.S. investments. In the bond market in Israel, rates are attractive and turnaround times are quite brief, meaning that a company can have a prospectus filed with securities regulators in Israel and money raised in a short time. Ben-Ari said he is seeing rates between four and five percent on such bonds, which are properly understood as unsecured corporate bonds, although some people confuse them with mezzanine debt in the U.S.
“This is not asset-based lending, this is balance sheet lending, where you underwrite a portfolio of income-producing assets,” Ben-Ari said.
As an example of an operator undertaking such an offering recently, Ben-Ari pointed to Extell’s raising of $270 million in its inaugural offering. The appetite is for a bond offering in the range of at least $100 million, not less, he noted.
“Extell was the first time a U.S. developer issued on the Tel Aviv Stock Exchange combining income-producing assets and development assets in the pool,” he added.