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Billionaire brothers raise US property bet with LA project

They are putting up US$275m for the redevelopment project

London

BRITISH billionaire brothers David and Simon Reuben are continuing their run of big investments in US real estate, financing a US$275 million loan for a major construction project in Los Angeles.

The pair funded a senior mezzanine loan for the US$2.5 billion redevelopment of the city's Century Plaza site, they said in a statement.

They previously acquired a stake in another loan for the project, which includes two residential towers, retail space and a luxury hotel.

The siblings have completed a string of deals in the US this year. In February, they finalised financing for the Time Hotel in New York and the Apthorp, an apartment building on the city's Upper West Side.

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Three months later, they acquired Manhattan retail property near Rockefeller Center from SL Green Realty Corp for about US$170 million.

The Reubens control one of the world's biggest portfolios of retail, office and residential properties. Sons of Iraqi Jews, they were born in India and moved to London as teenagers.

They built a fortune trading metals and later invested in real estate, leisure and technology firms. They have a combined net worth of about US$12 billion, shows the Bloomberg Billionaires Index.

Many of the world's rich - from Zara founder Amancio Ortega to banking magnate Joseph Safra - have long favoured real estate, an asset offering stable cash flows, tax breaks and leverage opportunities.

Those lending privately - like the Reubens - often focus on real estate, with property developers turning to wealthy individuals or their investment firms for extra flexibility and faster access to cash than most banks can offer.

In return, the private lenders typically get the security of an asset-backed loan that provides consistent cash flow from interest payments.

The Reubens have been active this year outside the US as well. They have made a push into Madrid's residential market, bought almost 90 hectares in Spain's Balearic Islands and backed a takeover bid for Newcastle United Football Club.

They also donated about US$100 million to Oxford University's newest college, which will bear their name. BLOOMBERG

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