Income-producing real estate companies Amot Investments Ltd. (TASE:AMOT) and Bayside Land Corp. Ltd.(Gav Yam) (TASE: BYSD1) are in advanced negotiations with WeWork. The parties are discussing a lease in which WeWork will rent half of the space in the 30-storey ToHa office tower being constructed by Amot and Bayside on the Totzeret Ha'aretz site, which is bordered by Totzeret Ha'aretz and Yigal Alon Streets, and Hashalom Road. The tower, with 53,000 square meters in gross space, plus 950 parking spaces, will cost NIS 900 to build.
Amot today reported in its financial statements that marketing of the project had begun in the second quarter, and that as of the date of the report, advanced negotiations were being held with international companies involving over 50% of the space in the project. The partners in construction of the tower believe that construction will be completed in late 2018.
As reported in "Globes," negotiations between the project developers and WeWork are for 27,000 square meters in space at NIS 70-80 per square meter per month (in shell condition, excluding finishing work, which the tenant will carry out). Since the period of the lease under discussion is up to 20 years, including several extension options, total payment over the entire period is likely to reach NIS 450 million if the deal is signed, making it WeWork's biggest deal in Israel to date.
Chief creative officers Miguel McKelvey and CEO Adam Neumann, an Israeli, founded WeWork in 2010. The company creates and manages shared work spaces throughout the world, dividing office space into rooms and leasing them, by the room or even by the table, for short periods. WeWork's value has increased over the years. The company raised $355 million in late 2014 at a company value of $5 billion, while it was recently reported that Japanese firm Softbank had invested hundreds of millions of dollars in WeWork at a company value of $20 billion.
Published by Globes [online], Israel Business News - www.globes-online.com - on August 9, 2017
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