Google Israel is continuing its expansion. Sources inform “Globes” the US tech giant, which has long been trying to tempt its neighbor in the Electra Tower to vacate their offices, is close to reaching an agreement with Adler-Chomski to clear thefour floors it uses in the building.
The advertising agency will receive millions of shekels in compensation for the relocation. Adler-Chomski leased four floors 6,000 square meters in the tower in 2009. The five-year contract included a five-year extension option.
Adler-Chomski’s residence in the tower was not coincidental; at the time, sources who wished to remain anonymous hinted at a connection between the rental agreement for the offices and the agency being entrusted with the advertising account for the Electra Group.
Even back then, there were rumblings the deal would not pay off in the long run, because of the high rent combined with Electra spending significantly less on advertising than expected.
Eventually, a dispute erupted between the two parties, and Electra tried to end its involvement with Adler-Chomski. Theagency decided to put up a fight as “Globes” revealed at the time through political and legal channels which addressed the office-tower-budget triangle, and the way was paved for the agency to take charge of the account again.
Since then, the Electra Tower has undergonea change of ownership. Electrasold its holdings in the building toNakash Holdings, which became sole proprietor of the commercial space with 75% owned through Amcor, which Nakash Holdingscontrols, and 25% owned directly by the Nakash brothers.
Google began its residency in the Electra Tower in 2012, long after Adler-Chomski, and has since been looking for ways to expand. Initially, the US giant rented six floors in the building, but it eventually leased several more partly on the back of advertising agency JWT Israel, which received a generous financial offer to make the relocation an attractive proposition.
It took Google more than a year to staff the offices left by the advertising agency.
In the past year, Adler-Chomski has seen widespread layoffs, with more than 100 employees dismissed. However, industry experts believe size is not a determining factor in the decision to vacate the offices for Google as the empty offices were allocated to advertising agency Brickman, which relocated after Adler-Chomski increased itsstake in the firm.
The primaryreason for the potential relocation is the financial incentives offered by Google, which makes the transfer financially appealing.
Published by Globes [online], Israel business news - www.globes-online.com - on March 29, 2016
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