Lawyers Gornitzky in talks on NIS 100m offices

La Guardia Tower  photo: Aviv Hofi

Gornitzky & Co. is bucking the trend by buying new office space instead of renting it.

The Gornitzky & Co. law firm is negotiating with Vitania Ltd. (TASE:VTNA.B1) and Delek Motors to buy 8,000 square meters of office space in the Delek Motors tower under construction by the two companies on the corner of La Guardia and Heharash Streets in Tel Aviv, sources inform "Globes." The price for the deal is estimated at NIS 10,500 per square meter in shell condition, making a total price of NIS 84 million. A source associated with the deal said that when finishing work and parking spaces are included, the price was likely to top NIS 100 million.

Vitania and Delek Motors bought the five-dunam (1.25-acre) lot at the intersection near the Ayalon Highway in 2008 for NIS 64 million. An underground parking lot is being constructed on the site under a 4,000-square meter car showroom, with a 29-storey office tower next to it, in which Gornitzky is slated to buy 8,000 square meters. In 2012, the companies bought a seven-dunam (1.75-acre) adjacent lot from Engel Resources and Development for NIS 76 million. The zoning plan that applies to the lot allows the construction of two more high-rises, including residential and hotel construction.

The unusual deal involves the purchase of space, in contrast to currently prevailing practice among large law firms leaving old office buildings for new office high-rises now under construction. For example, Herzog, Fox, & Neeman is expected to leave Asia House for 15,000 square meters that it rented early this year in an office tower being built by the Rubinstein company on the Yitzhak Sade site. Fischer, Behar, Chen, Well, Orion, & Co. is also expected to move from the Daniel Frisch tower to a new office tower being constructed by Azrieli Group Ltd. (TASE: AZRG) on Menachem Begin Road on a Clalit Health Services site, where the law firm has rented 10,000 square meters of offices.

Gornitzky is rated in seventh place among Israel's top 20 law firms on the Duns 100 listing (Dun & Bradstreet in cooperation with "Globes"). The firm, which has 168 lawyers and 46 partners, is currently located in the Zion building at 45 Rothschild Boulevard in Tel Aviv.

Vitania Ltd. was established in 1995 by four partner groups: S.G.S.; the Propper Family (Osem); Gitam Ad Agency; and the Hamama Family. Until the company’s IPO on the Tel Aviv Stock Exchange in July 2015, its shares were held by its group of founders (60%) and Harel Insurance Investments and Financial Services Ltd. (TASE: HARL) and Flying Cargo (20% each). Since its IPO, the public has held 17% of its shares.

Published by Globes [online], Israel Business News - www.globes-online.com - on July 10, 2017

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

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La Guardia Tower  photo: Aviv Hofi
La Guardia Tower photo: Aviv Hofi
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