The Phoenix Group and Gabay’s family trust Yellowstone will jointly invest US$ 200 mil equity in New York, Boston, Houston, Seattle and San Francisco.
The Phoenix Group will also enter as a partner at the Watson Hotel in Manhattan that Yellowstone recently acquired.
The Phoenix Insurance and Finance Group, led by Eyal Ben-Simon, joins Yakir Gabay’s יקיר גבאי family trust and establishes a partnership to make real estate investments in the United States. The alliance comes to take advantage of the opportunities created in the American real estate market following the Covid-19 economic crisis.
In the first phase, Phoenix, which is controlled by American investment funds Centerbridge and Glattin Font, will invest US$ 100 mil in the new partnership, while Yellowstone Real Estate will invest US$ 100 mill. Yellowstone is controlled by a trustee of Gabay’s family and is managed by Tzachi Hara. The US$ 200 mil equity will be used to leverage much larger investments.
Through this platform, the partners intend to make investments in hotel, office, logistics and hospitality properties throughout New York, New Jersey, Boston, Houston, Seattle and San Francisco.
Until a few months ago, Yellowstone was Yitzhak Tshuva’s partner in Elad Group’s operations in clusters of more than 14,000 apartments for rent in the United States. This business was recently sold and generated a US$ 200 million cash flow to Yellowstone. Now the current focus is seizing opportunities and acquiring properties with potential for improvement in the US.
The value of the Phoenix real estate portfolio reaches NIS 12 billion, of which NIS 3 billion is in the United States. To date, however, Phoenix has not made any significant direct investments in U.S. real estate but has focused primarily on providing equity capital to developers and companies. These are transactions with a higher risk profile, with a potential to deliver higher returns.
Phoenix is now interested in taking advantage of the opportunities that have arisen, and later intends to add additional Israeli institutional and qualified investors to the enterprises.
Phoenix, which was previously been controlled by Yitzhak Tshuva’s group, has had a long-standing acquaintance with by Yakir Gabay יקיר גבאי. Phoenix invested in several of his businesses including Aroundtown and Grand City Properties. In recent months, Phoenix had been considering making another deal with Yellowstone in the US, but they have finally decided to set up a joint US real estate investment platform.
As part of the new partnership, Phoenix will become (along with another local actor) Yellowstone’s partner in the huge deal it recently made in Manhattan, when it acquired the Watston Hotel for about US$ 175 mil as part of one of the largest hotel deals during the Corona crisis. The price offered by Yellowstone for this hotel, whose owners had gotten into insolvency, was the largest investment amount made in Manhattan since the pandemic halted world travel (which had previously been the US$ 150 mil paid by billionaire brothers David and Simon Reuben for the Sari Hotel).
The deal on behalf of the Phoenix was led by Hagai Schreiber, head of the investment division, and Guy Porat, director of Phoenix’s real estate operations.