Electra Real Estate Stock Plummets 16% Amid Rising US Yields

Electra Real Estate, controlled by the brothers Daniel and Mikey Zalkind, saw its stock price drop by 15.9% on the stock exchange yesterday. This decline is attributed, in part, to rising yields in the United States, which negatively impact the valuation of the company's assets, despite its success in attracting investors for its rental housing projects.

Year-to-date, the company's stock has lost approximately 67.2% of its value. It began the year valued at 4.5 billion shekels, falling to just over 1 billion shekels (1.063 billion shekels as of yesterday). The company faces the challenge of rising interest rates in the US, a situation that has previously impacted office and residential markets in Israel.

In parallel, Electra has completed the sale of rights for a housing project in Houston, Texas. According to the company, the property's net operating income (NOI) grew by about 23% from its acquisition to the sale. The final internal rate of return (IRR) for the property was approximately 2.4%, with an equity multiple of about 1.16.

Following this transaction, Electra's second fund for rental housing investments now holds 8 projects. The expected gross annual return for the fund, after accounting for this sale, is around 15.5%, with an expected gross multiple of approximately 2. The company stated that these figures demonstrate the fund's diversification advantage, ensuring strong overall performance even when individual property sales yield single-digit returns.