Frequently Asked Questions

 

The documents in the Investor Package are geared towards raising funds from foreign (non-Israeli) investors. Is there a problem accepting funds from an Israeli citizen or resident?

Not at all. While our initial focus is on foreign investors, we are permitted (and happy) to accept funds from any person (including an Israeli citizen or resident) who satisfies the Investor Suitability Requirements set forth in the Habira Group REIT Private Placement Memorandum (PPM). If you would like to review a copy of the PPM, please send us a request via the Contact page on our website and one will be e-mailed to you shortly thereafter.

 

Are there properties lined up for the initial investments?

We have looked at many properties over the past year and continue to look at potential investment properties as we move forward in our fund-raising efforts. We plan to begin buying property once we have received signed commitments totaling 20 million shekels (approximately USD 5.7 million). We have no intention of calling funds and having the money sit in the bank. The day we call the initial funds will be the day we are ready to sign on the first deals.

 

The PPM indicates that you are currently raising funds in a private placement. Is there also a plan for a public listing?

One of the primary differences between the U.S. REIT rules and Israeli REIT rules is the requirement for a public listing. In Israel, a REIT must be publicly listed on the Tel Aviv Stock Exchange within one year of its formation. So while the current capital raise is via a private placement, the goal is to follow the private placement with an IPO. As required by the Israeli REIT rules, the intent is for the IPO to occur within one year of the formation of the REIT corporation (which itself will occur only once we have received commitments totaling at least 20 million shekels).

 

What kind of assurance can you provide that the IPO will indeed occur?

We have structured the formation of the REIT so as to provide us with the highest likelihood of success possible. As mentioned above, under the Israeli REIT rules, a REIT must be publicly listed within one year of its formation. Moreover, a REIT must have assets with a minimum gross value of 200 million shekels. To provide us with the highest likelihood of success in meeting these requirements, we are deferring the formation of the REIT Corporation until such time as we have signed commitments of at least 20 million shekels (which, with leverage, should provide us with approximately 40 million shekels of buying power) and are prepared to purchase our first property. Once we begin buying properties, we would expect to have sufficient market awareness and momentum among both foreign and Israeli private and institutional investors to allow us to raise via the private placement and the subsequent IPO the remaining funds necessary (taking into account leverage) to meet the 200 million shekels threshold.

 

Of course, it is always possible that we will not be successful in consummating the IPO, in which case, the investors will be shareholders in a private corporation that owns quality real estate. There is also the possibility that we will move forward with an IPO even if we are unable to reach the 200 million shekels threshold, although in that circumstance we would not qualify as a REIT.

 

What are the consequences if the company does not qualify as a REIT?

If the company does not qualify as a REIT, it will be treated as a regular corporation subject to corporate level tax on its income. This could have the effect of reducing the amount of cash available to be paid to shareholders as a dividend. In addition, certain limitations relating to the types of activities the company can engage in, the types of income it can earn, the types of assets it can hold, the amount of leverage it can utilize and the amount of income it must distribute will not apply. However, even without these limitations, it is our intention to manage the company in a manner that will maximize shareholder value, while minimizing risk.

 

What is the minimum investment for the private placement?

175,000 NIS (approximately USD 50,000)

 

(And our absolute favorite question…)

If I change my name to “Mark,” can I join the board of the company?

If you do not understand this question, you have not looked at our website. Check out Management Team page for the answer to this question!

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