News
BOSTON-ISRAEL CONNECTION
April 5, 2011
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| For the first time in 20 years, a Massachusetts governor sent a trade delegation to Israel; it returned mid-March with plans to start the New England Israeli Business Council, a trade office. We snapped some of those delegates last Tuesday at a NAIOP/CJP event: NAIOP's David Begelfer and HYM?s Tom O?Brien. Riemer & Braunstein?s Bob Buckley was moderator. Israel leads the worldin the venture capital it attracts—$300 per person a year—compared to about $90 in the US and hardly any in China and India. NAIOP's David Begelfer says Massachusetts needs to show Israeli business leaders that the state is friendly and offer opportunities, including real estate for investment and work space. |
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| Goulston & Storrs David Abromowitz says that Israelis have $3B to $4B to invest in US CRE in the next 18 to 24 months. They're looking for existing cash flow properties in strong core markets, perhaps including distress deals. They aren't interested in new development; preferred size is $10M to $15M equity in deals valued at $100M to $150M. While Massachusetts is home to many Israeli companies, Israeli investors find the Boston area to be anexpensive and segmented market favoring insiders. But Israelis like Boston's emphasis on education and entrepreneurship. The governor?s recent visit laid the groundwork for closer ties. Now, David says, Bostonians must encourage Israelis to deploy capital here. |
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| Tom says the delegation was a little shocked that many Israeli tech and life science companies thought of investing in Silicon Valley before Boston, even though logistically the Hub is easier. One critical measure would be to encourage direct flightsbetween Israel and Boston. In a small country like Israel, he tells us, when people do business, they get on a plane. El Al is nowconsidering direct flights to Miami, DC, and Chicago. Tom says Boston would do well to get on that list. The key, he stresses, is follow up to mine the opportunities. |
