Last week "Globes" revealed that the US Ambassador to Israel's residence at 40 Galei Tachelet Street in Herzliya Pituah was up for sale after the embassy had moved from Tel Aviv to Jerusalem. Sources informed "Globes" that the US Embassy was asking NIS 300 million ($87 million) for the property. Will it get that price?
The house, which is overlooking the seafront, in the western part of Galei Tachelet Street, was built in the early 1960s with additions from the 1970s and 1980s. The house itself is 1,000 square meters in size on just over 5,000 square meters of land. From my understanding, the property is neglected and any potential buyer will likely demolish the house and rebuild something new.
The location is one of the most exclusive and coveted in all Israel. The street itself is characterized by very high quality housing. The homes on the west side of the street nearest the sea, like the US Ambassador's residence, are on a cliff with a clear view of the Mediterranean, and thus command the highest of prices.
The best way to assess the price is to look at similar deals for nearby properties on the western side of Galei Tachelet Street. According to the Israel Tax Authority website most of the purchases of nearby property were some time ago, many of them before more than a decade. Nevertheless, because of the unique location, these still make the best comparisons.
Last month an empty 1,094 square meter lot at 54 Galei Tachelet Street was sold for NIS 72 million while in 2015 a 1,025 square meter empty lot at 52 Galei Tachelet was sold for NIS 67 million. In 2011, there were two deals at 60 and 62 Galei Tachelet Street each with a house for demolition with 1,018 square meters and 1,028 square meters respectively sold for NIS 66.9 and NIS 67.9 million respectively. And in 2009, a 1,277 square meter lot with a house for demolition at 66 Galei Tachelet was sold for NIS NIS 82 million.
Taking into account this comparative data, the price of a square meter of land on the western side of Galei Tachelet Street in Herzliya Pituah is around NIS 65,000. Taking into account that the US Ambassador's residence is on 3,000 square meters of land with an additional 2,000 square meters of land on which there are no building rights, then the value of the property should be around NIS 250 million ($72.5 million).
The author is a real estate appraiser specializing in financial support for real estate ventures, preparing reports and real estate taxation.
Published by Globes, Israel business news - en.globes.co.il - on July 6, 2020
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