Fisher Brothers Taps Israeli Bond Market for Office Buyout

Fisher Brothers Taps Israeli Bond Market for Office Buyout · CRE Daily

Jordan B.

Mon, August 24, 2026 at 8:36 PM GMT+3 4 min read

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Key Takeaways

Fisher Brothers is raising roughly $100 million in unsecured Israeli bonds, partly to buy out JPMorgan's 49 percent stake in 605 Third Avenue.
JPMorgan sought a $425 million valuation for its stake, but Fisher Brothers will pay about $11.5 million since the interest sits below the building's $400 million mortgage.
The offering tests Israeli investor appetite for U.S. real estate after recent bond troubles at Simad Holdings and GFI Capital rattled the market.

Fisher Brothers is turning to the Israeli bond market to buy out JPMorgan Asset Management's stake in its Midtown tower at 605 Third Avenue, according to The Real Deal. A British Virgin Islands entity tied to the New York-based developer filed a prospectus on the Tel Aviv Stock Exchange on Aug. 13, seeking to raise about $100 million in unsecured bonds.

A Discount Deal

JPMorgan listed its 49% interest in the 43-story, 1-million-square-foot tower last month. It sought a $425 million valuation.

But the stake sits behind the building's $400 million senior mortgage. As a result, Fisher Brothers will pay only about $11.5 million for the interest if the deal closes.

The steep discount shows how little equity remains in a highly leveraged Manhattan office tower. It also highlights how debt can erode an equity stake's value when property values fall below outstanding loan balances.

The Details

605 Third Avenue is 84% leased. Fisher Brothers plans to use bond proceeds for capital expenditures and leasing costs across its portfolio. The firm will also use the funds for general working capital.

Fisher Brothers reported $5.4 billion in assets at the end of 2025. It also reported $220 million in net operating income and $460 million in revenue in its Tel Aviv filings.

The firm received a preliminary 'ilA+ investment-grade rating from S&P Global Ratings Maalot. The debt is expected to price at 6% to 6.5%, according to a source familiar with the matter.

That rate is below what many U.S. lenders currently quote for comparable unsecured office-backed borrowing.

Zooming Out

Israeli bonds have become a popular financing tool for U.S. developers seeking lower rates than domestic lenders offer. But the market has faced several recent setbacks.

Simad Holdings, which owned 30 U.S. summer camps, defaulted on its bonds in May. About $34 million had been diverted to companies controlled by its owners. Bondholders are still expected to recover their full investment.

GFI Capital, another New York real estate firm, also warned bondholders this month that it could miss payments. The company may need to restructure debt tied to its struggling NoMad hotel.

Fisher Brothers' offering will test whether Israeli investors still want U.S. real estate debt. The deal comes amid a broader rebound in New York office investment.

Why It Matters

Publicly traded Israeli bonds require private real estate companies like Fisher Brothers to disclose detailed financials and quarterly reports. That level of transparency can either reassure or concern investors.

For Fisher Brothers, the raise also signals confidence in 605 Third Avenue's leasing prospects. The firm signed a 765,000-square-foot, 20-year lease with Paul, Weiss at its 1345 Sixth Avenue tower in 2023.

It also recently signed a 20,000-square-foot lease with Karbone at 605 Third Avenue. The deal came at $120 per square foot.

What's Next

If the offering closes, Fisher Brothers will control all of 605 Third Avenue's equity. That would give the firm full control over leasing and capital decisions.

Investors and rival developers will watch the offering's final pricing. Fisher Brothers is targeting a 6% to 6.5% rate. The final yield will show whether recent defaults have changed risk pricing in Israel's bond market.

A successful raise could encourage other private New York landlords to pursue Israeli bonds. They could use the market to access cheaper unsecured capital instead of relying on traditional bank or CMBS financing.