Feb 9 - Elbit Imaging Ltd (NASDAQ: EMITF) (“Elbit”) announced today that its subsidiary, Elbit Plaza USA LP (“Elbit Plaza USA”), a real estate investment venture jointly formed by Elbit and its subsidiary, Plaza Centers NV (LSE: PLAZ) (WSE:PLAZ/PLAZACNTR) (“Plaza”), has entered into a framework and co-investment agreement (the “Agreement”) with Eastgate Property LLC, an affiliate of NCH Capital Inc (www.nchcapital.com), an established U.S. based international real estate fund manager (“Eastgate”).
Under the Agreement the parties have committed to co-invest in equal portions a combined $200 million with a U.S. real estate investment fund that will be jointly established by the parties with outside investors and which will focus on investments in the U.S. retail and commercial real estate sectors (the “Fund”).
Eastgate shall take an active role in the joint management of the Fund utilizing its long-standing experience in fund management activities in the U.S.
The parties intend to take advantage of real estate opportunities in the U.S., primarily in the retail and commercial sectors. The Agreement provides that the parties will identify and locate potential investments during a two-year period in which the Fund together with the co-investment facility will acquire assets or enter into joint ventures with owners of relevant assets or portfolios, with the objective of selling the Fund’s assets or holdings and dissolving the Fund within a five-to-seven-year period of the initial closing of the Fund.
The Agreement is part of Elbit Plaza USA’s efforts of securing capital commitments totaling, together with Elbit Plaza USA’s and Eastgate’s investments, approximately $400 million to be utilized in pursuit of the Fund’s investment program, enabling the funding of property acquisitions valued at up to $1 billion taking into account potential leverage.
Motti Zisser, Executive President, commented: “The capital commitment in the amount of $100 million by Eastgate, a sophisticated real estate investor with an impressive track record, clearly demonstrates its confidence in Elbit Plaza US’s ability to create value with respect to the proposed real estate transactions in the U.S. We plan to raise additional capital commitments from Israeli and foreign investors, some of which have already expressed an interest to join the Fund.”
Dudi Machluf, Chief Executive Officer (Co-CEO), commented: ”Elbit Imaging and Plaza Centers believe that the current financial crisis in the U.S. and specifically in the real estate market has created a unique opportunity to acquire interests in high quality operating properties generating net operating income at very attractive valuations not seen in the recent past, with a unique potential for significant appreciation.
Furthermore, we believe that, as the global and U.S. markets recover, the Fund should be well positioned to deliver significant value on its investments. We are confident that the expertise and experience gained by Elbit Imaging and Plaza Centers in the real estate markets in general, and the shopping malls and shopping and entertainment centers businesses in particular, will help us to utilize to the fullest extent the promising potential of those investments.”