The Gornitzky & Co. law firm has purchased five office floors in the Delek Motors project at the corner of La Guardia Street and Hamasger Street in Tel Aviv for NIS 83 million. "Globes" first reported the negotiations between the parties in July 2017.
The project, which is being constructed by Vitania Ltd. (TASE: VTNA), contains 4,000 square meters of auto display showrooms in two low buildings that have been completed and occupied. Vitania is building an office tower above one of the buildings with 36 floors and 40,000 square meters of space.
The firm bought floors 23-27 with 1,260 square meters of space per floor in the tower - a total of 6,300 square meters. The deal also includes an option to buy two more floors later. The average price per square meter in shell condition in the project is NIS 10,500-11,000. Gornitzky is paying nearly NIS 70 million for its five floors, plus NIS 13 million more for a parking floor. Gornitzky is also likely to spend millions of shekels on finishing work to adjust the offices to its needs.
Vitania is also negotiating with a number of restaurants for leasing commercial space on the entry floor to the office tower. The Delek Motors projects is planned to eventually include 150,000 square meters. In addition to the commercial space, auto display rooms, and office tower, the project also includes approved construction rights for building a residential tower and hotel space at a later stage.
Purchases of office space by large law firms are rare; most of the firms rent. Gornitzky is currently located on a number of floors in a building on Rothschild Boulevard in Tel Aviv owned by Migdal Insurance and Financial Holdings Ltd. (TASE: MGDL) and Harel Insurance Investments and Financial Services Ltd. (TASE: HARL). The law firm, which specializes in commercial and tax law, litigation, real estate, and mergers and acquisitions, has 220 lawyers, 55 of whom are partners. It has grown in recent years, and its managing partners therefore decided to buy offices to accommodate its future expansion.
"A strategic measure"
The Delek Motors project was selected because its proximity to the Ayalon Highway, the Hagana Railway Station, and the future light railway station on the Yitzhak Sadeh Street site, making it very accessible. Gornitzky said, "The decision to switch from renting to ownership and from Rothschild Boulevard with its congested transportation and access problems to the prestigious project located close to the Ayalon Highway artery is one of a number of strategic measures spearheaded by manager partners Advocate Lior Porat and Advocate Kfir Yadgar."
Vitania is one of Gornitzky's clients, which also contributed to the selection of the project. Gornitzky real estate and construction team head Advocate Shlomo Cohen headed the deal for his firm, while Advocate David Magriso and Advocate Rinat Dvash represented Vitania.
Vitania, which specializes in income-producing real estate, has 170,000 square meters of income-producing real estate in Tel Aviv and Herzliya Pituah. The company managed by CEO Ofer Ziv, has 195,000 square meters of real estate in planning and development proceedings in Tel Aviv, Herzliya, and Or Yehuda. The company, which posted a NIS 69 million profit in 2017, is controlled by the owners of SGS (Yarongal and Ehud Samsonov - Samsonov is chairperson of Vitania), Dan and Gad Propper, Gitam Image Systems, Hamama Brothers & Co., Harel, and Flying Cargo.
Published by Globes [online], Israel business news - www.globes-online.com - on May 27, 2018
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