WeWork in talks to lease 15 floors in Tel Aviv tower

New Tel Aviv office tower Photo: Viewpoint

The deal in the 30-floor ToHa tower would be the company's biggest in Israel.

WeWork, which builds and manages shared work spaces throughout the world, is negotiating a major deal for renting half of the space in the ToHa office tower under construction on Totzeret Ha'aretz Street in Tel Aviv opposite the Azrieli Center near the intersection of Hashalom Road and Yigal Alon Street, sources inform "Globes."

The 30-floor, 55,000-square meter ToHa tower was developed by income-producing real estate companies Bayside Land Corp. Ltd.(Gav Yam) (TASE: BYSD1) and Amot Investments Ltd. (TASE:AMOT). Market estimates of rents in the project, on which construction has only begun, are around NIS 70 per square meter in shell condition (not including finishing work by the tenant). Since the period of time being discussed by the parties is up to 20 years (including several extension options), the total rent for the entire period, if the lease is signed is likely to reach NIS 450 million, making it WeWork's biggest deal in Israel to date. Bayside and Amot declined to comment on the report.

2,500-3,400 square meters per floor

The developers say that the ToHa tower will be "an innovative and sophisticated business environment that can be expected to change the area." The project is located near the Hashalom railway station, a central and important transportation junction, and will expand the growing business center on Yigal Alon Street, Menachem Begin Road, and Hashalom Road. Floors in the tower will have 2,500-3,400 square meters. The roof floor of the tower will have restaurants, cafes, and a balcony with an open view. Architects Ron Arad and Avner Sher designed the project.

Managed by CEO Avi Jacobovitz, Bayside Land is a subsidiary of Property and Building Ltd. (TASE: PTBL) (part of the IDB Development Corporation Ltd. (TASE:IDBD) group). Its market cap is NIS 3.2 billion. Both by itself and through its subsidiaries, the company deals in income-producing real estate, development, design, construction, leasing, maintenance, and management of industrial and business parks, office buildings, commercial space, storage buildings, and parking lots in the high-demand areas all over Israel.

Managed by CEO Avi Mousler, Amot is part of the Alony Hetz Property and Investments Ltd. (TASE: ALHE) group, and has a NIS 5.7 billion market cap. Amot owns income-producing properties in Israel with over 1.2 million square meters in aggregate space and an occupancy rate of 97%. Amot's most prominent properties include the Atrium Tower in Ramat Gan, the Amot Tower (formerly IBM House) in Tel Aviv, the Amot Mishpat House in Tel Aviv, the Amount Insurance House in Tel Aviv, the Arim Mall in Kfar Saba, the Kiryat One Mall, Pelephone House in Givatayim, and many other properties.

Chief creative officers Miguel McKelvey and CEO Adam Neumann, an Israeli, founded WeWork in 2010. The company divides office space into rooms and leases them by room, or even by table, for short periods.

WeWork is active throughout the US, as well as in Argentina, Australia, Brazil, Canada, Germany, China, and other countries. In Israel, it has sites in Beer Sheva and Herzliya, and in Tel Aviv on Ibn Gvirol Street, Dubnov Street, and in the Sarona complex.

WeWork also offers its tenants joint networking events, vacations, and summer camps; discounted health insurance; and more. The company's value has risen over the years. The company raised $355 million at a $5 billion company value in late 2014 and $400 million at a $10 billion company value in June 2015, and has been valued at $20 billion this year. According to a CNBC report in February, Japanese corporation Softbank is likely to invest $4 billion in the company.

In a "Globes" interview 18 months ago, Neumann (selected by "Globes" as one of the 40 most promising young entrepreneurs) said, "We enable people to be part of a global community in which everyone is at the early business stage, with many difficulties, an in which great motivation is needed. We put them under one roof, and they meet each other and talk with each other, and attain a degree of success they could not have achieved without this. The effect is not obvious. Say that someone comes from Chicago and does not know people in New York, and he joins WeWork. He meets people, and that leads to connections and relationships that will later affect his future."

Published by Globes [online], Israel Business News - www.globes-online.com - on June 25, 2017

© Copyright of Globes Publisher Itonut (1983) Ltd. 2017

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New Tel Aviv office tower Photo: Viewpoint
New Tel Aviv office tower Photo: Viewpoint
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