The Tel Aviv Stock Exchange has turned into a destination for large and medium sized U.S. real estate developers to access Israeli capital.

Israeli institutions are hungry for the diversification opportunities and relatively higher interest rates offered by American developers of good reputation. For the developers, Israel presents a good rate arbitrage opportunity, as the interest rates available to quality issuers are lower than rates on comparable mezzanine or junior debt available in their local markets.

Another benefit some developers see is that the deals can be done in small chunks that are suitable for their immediate capital needs: offerings that in the United States would be considered too small, for example, $100-200 million, are right-sized for the Israeli market.