A penthouse priced at NIS 150 million in the 96 Hayarkon Street project, which was ready for occupancy in 2012, has remained unsold. Located on the eighth and ninth floors of the building overlooking the sea, the unit covers 700 square meters, plus 300 square meters of balconies.
The Faire Fund, owned by Zalman Shoval and Shlomo Grofman, constructed the building. The lower part and facade of the project are composed of two Bauhaus buildings marked for preservation, which were thoroughly renovated, and a new nine-storey building with 45 apartments was built above them. Half of the apartments had been sold by the time the building was ready for occupancy, but the penthouse was not among them.
The Faire Fund offered the penthouse for NIS 120 million in 2011, but announced a year later that Sotheby's had put it up for sale for NIS 150 million in an auction.
TVM Premium realtor Shlomi Ben Ishai, an expert in marketing luxury apartments, said, "The project is prestigious, but not excessively so. Luxury apartments cost NIS 7-15 million. NIS 20-30 million apartments are super-luxurious, and apartments costing over NIS 40 million are mega-luxurious. People who buy apartments like that own apartments all over the world, and they know what luxury is. When they see a project with no swimming pool, a standard lobby, and a completely ordinary elevator, they give up the idea. It's a different level than projects like G Tower, 1 Rothschild, or Remez Tower.
"Someone buying a penthouse for NIS 70 million or NIS 50 million doesn't want to live in the same building as people who bought an apartment for NIS 5-10 million. They want to live among people like them. Because most of the apartments in 96 Hayarkon are relatively small, they cost around NIS 5-10 million. It's true that the project is in a class by itself, because it includes preserved architecture, but a ninth-floor view isn't the same as a 30th floor view.
"The marketing strategy was also wrong. The price for the penthouse was unrealistic. They asked NIS 80 million for it during some periods, NIS 90-100 million in others, and once even NIS 120 million. The penthouse has already been on the market for five years, each time at a different price, and that's a problem. Had they divided it into four nice apartments, or built a building with fewer apartments, they would have got larger apartments, the price gap between the ordinary apartments and the penthouse would have been smaller, and things might have been different.
"I told the Faire Fund to replace the elevators with the fanciest ones around. Even if it had cost them NIS 1 million, it would have been worthwhile, but they didn't do that. In order to sell to a billionaire, you have to think like a billionaire."
The Faire Fund said, "The penthouse is a unique property, a real jewel, with the best location in Israel, between the US and UK embassies in a building marked for preservation that is like a Bauhaus museum. The combination of history and innovation in a unique Tel Aviv icon with both historical and real estate value makes it absolutely priceless.
"Negotiations with foreign parties seeking to buy the property in recent years have not yielded a sale for a variety of reasons, including the government's policy, which is not only unfriendly to Jewish investors, but positively persecutes them. High purchase tax, other taxes, and the general atmosphere have more than once put off good Jews with means seeking to buy this unique historical property in the 96 Hayarkon project."
Published by Globes [online], Israel Business News - www.globes-online.com - on March 20, 2017
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