Real Estate Market Crisis? Ron Hochman Establishes Fund for Investment and Project Financing
Ron Hochman, former CEO of Mizrahi-Tefahot Invest, is launching a new real estate investment firm. The company aims to build a portfolio of 1 billion shekels over the coming years.
Ron Hochman, former CEO of Mizrahi-Tefahot Invest, is establishing a new real estate investment company, aiming to build a portfolio of 1 billion shekels over the coming years. The company will focus on capital investments and mezzanine deals by creating strategic partnerships with real estate developers, with its primary focus being in Israel.
The timing is somewhat surprising in light of the slump in apartment sales in the country, the difficulties faced by developers and contractors, and the record number of apartment purchase cancellations reported recently. However, Hochman, who resigned from the bank last February, apparently believes the market will recover.
The company's activity is expected to emphasize the urban renewal sector, which is becoming a key engine in the housing field. The shortage of available land in high-demand areas and the need to strengthen and renovate buildings are expected to make 'pinui-binui' (evacuation and construction) and TAMA 38 projects a central axis in supplying new housing units.
«Many developers are looking for financing solutions and financial partners who know how to manage risks in changing market conditions,» stated Hochman, who is expected to manage the fund, and his partner Tsuri Levy in presentations held for family offices and private investors.
Levy was Hochman's deputy at Mizrahi-Tefahot Invest. The new company is expected to offer developers a wide range of solutions tailored individually to each project, rather than existing off-the-shelf products. The growth target set by the two is to lead the company to an assets-under-management volume of about 1 billion shekels within a few years. Fundraising is expected to stand at 200–300 million shekels in the first stage.
Several companies are active in the real estate market in this field, the most prominent of which is Archimedes, led by Eyal Lapidot, former CEO of Phoenix and Shikun & Binui, and Tali Richman, former head of real estate at Discount Bank. Hochman came to Mizrahi-Tefahot from the Sky fund (he is the nephew of founder Zvi Yochman), and Levy has experience in investment management, credit, and valuations. Before joining the bank, Levy served as a manager in the valuation department at the international consulting firm KPMG.
As part of their work at the bank, the two executed deals totaling hundreds of millions of shekels in the real estate sector, the most prominent of which were an investment in Reuven Ella's reporting real estate company, Tsahi Abu's rental housing REIT fund, a number of companies in the urban renewal sector including Radco, as well as in the real estate funds Reality, Timora, and others. Hochman held the position for five years and was replaced by Shimrit Koenig. He was effectively the first CEO of Mizrahi-Tefahot Invest, the investment arm established by the bank's CEO, Moshe Lari.
