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Electra Real Estate sells its rights to an office building in Chicago for 403 million NIS

Last month, the company reported that it intended to take advantage of the boom in the Canadian market and sell all of its properties in Canada, valued at a total of NIS 600 million.  At the beginning of the month, it reported that it had signed an agreement to sell 3 properties in Switzerland for approximately NIS 113 million in a deal that will yield a cash flow surplus of NIS 25 million.


Electra Real Estate, under the management of Shai Weinberg, reported an additional sale of properties that will yield a significant cash flow surplus.  The affiliate, owned by Electra Real Estate with a stake of 47%, and its partner, the Harbor Group, signed an agreement for the sale of the office building in Chicago, U.S. for NIS 403 million (approximately $112.5 million).


Electra Real Estate’s stake will total NIS 169.4 million (approximately $52.9 million), and the cash flow surplus to the company upon completion of the deal will total NIS 54 million ($15 million).  The cash flow is after the deduction of the bank loan and costs related to executing the deal.  The deal will be executed based on an amount similar to the book value of the property sold, so there won’t be a substantial effect on the company’s statement of operations. 


The property sold is an office building with a total area of 48 thousand square meters, which was purchased by Electra Real Estate and its partners in September 2006 for $91.5 million.  Electra Real Estate estimates that the completion of the deal will be completed in September 2013.


This deal will join another sale reported by the company at the beginning of the month and relates to properties in Switzerland.  The company reported that a foreign corporation, which owns 50% of the rights to three properties in the cities of Biel and Lucerne, signed an agreement for the sale of properties for NIS 113 million (29.6 million Swiss francs).  This deal will yield the company a free cash flow of NIS 25 million (approximately 6.5 Swiss francs).


In addition, Electra Real Estate announced last month that it intends to take advantage of the boom in the Canadian market and to sell all of its properties in Canada, valued at NIS 600 million in total.


Shai Weinberg, CEO of Electra Real Estate said today:  “Electra Real Estate continues to work according to its strategic plan of selling its properties in deals which yield high cash flows.  We will continue to work toward implementing our strategy to sell properties that have exhausted their improvement potential, with an emphasis on our plan to sell all of the properties in Canada, which is expected to significantly help to improve the company’s liquidity and its financial relations.  Concurrently, we are working toward improving our properties, which should be developed in order to create a future value for the company.”


Electra Real Estate, a member of the Elco Holdings Group, and under the helm of Shai Weinberg, owns 48 yield bearer properties, with an occupancy rate of 92%, and a total area of 800 thousand square meters (including parking areas).  The company’s properties are primarily located in Israel, Great Britain, Germany, Switzerland, the U.S. and Canada.