we recommend focusing on three subjects:
Congratulations! You’ve decided to open a new office, or expand your activities to a bigger space.
Suddenly and without warning, you find yourself feverishly searching for an office in Tel Aviv and coming across many new and unclear concepts, not to mention the dozens of listings you’ve already circled on various boards, where, almost invariably, what you read in print is so far from reality that you begin to doubt your comprehension skills. In short, you get all this headache and nothing to show for it, and we haven’t even touched on topics like realtors, contracts, business licenses and so on. So, let’s pause for a minute and put things straight in a way that will help you not only search for – but also efficiently find – an office for rent in Tel Aviv.
This article will focus on three elements only. Of course there are many more to take into account, but these three, in our opinion, are the most crucial for finding the right office, and will help you organize your search and get you and your company into your new offices with ease.
As for size, a standard office of around 100m2 can accommodate 3 to 10 people or even more, so you must have an idea of how much space is to be used by each employee, how many rooms are needed, or if you’re going to work in an open space, and then assess the necessary total office size.
It’s best to not be strict with your measurements and look out for a range of sizes. When it comes to size, pay attention to gross area versus net area; if we’re offered a 100m2 office, that would usually describe the gross area.
On for the budget: Here we must keep in mind the amount we’re willing to spend on property-related expenses, while taking into account supplementary current expenses, such as management fees, parking, water, electricity, property tax, et cetera. Prices per square meter, of course, vary according to zone and to supply and demand. A 100m2 office, for example, offered for 50 ILS/m2, will cost 5,000 ILS monthly. In reality, we get the net area. The net/gross area ratio varies according to the building, its shared spaces and the method of construction. In some buildings the difference could be 10% while others will have a gap of 30% or more between gross and net floor area, for which property tax is calculated (business property tax in Tel Aviv is usually 25 ILS/m2 more or less, excluding software companies or artists’ studios, which are eligible for a discount of up to 50%, as instructed by the Ministry of Interior).
A word on management fees: Every office and business property (almost) charges management fees, dedicated to maintaining the office building. A building’s current expenses may include cleaning, building and parking area maintenance, elevators, security, various types of insurance, as well as, on some occasions, air conditioning for the entire building, especially in tower blocks. These fees can amount to a few hundred ILS. An office located inside a residential building will pay standard maintenance fees, while in luxurious properties, fees can be as high as 25 ILS/m2. These fees, just like the rent, are based on gross area per month.
Regarding property taxes in Tel Aviv: When you rent an office space, you’re in fact hiring a business-licensed property, for which the Tel Aviv Municipality charges property tax. This expenditure is the renter’s liability (if the property is rented, and the owner’s liability, if the property is vacant) and is set according to net floor area and type of business. The fee is usually 25 ILS/m2 per month, so for an office with a net area of 100m², you’ll be charged a property tax of 2,5000 ILS per month. Some businesses, such as software companies or artists’ studios, receive benefits of up to 50% discount on property tax. You should find out how your business is defined in terms of property tax and make sure the property is legally permitted to be used as an office. This procedure can be performed at the Tel Aviv City Hall, or at the city hall of the town where the office you’re renting is located.
Finally, let’s talk about the zone. We’ll look at Tel Aviv, since the MISRADIM Group believes it to be the leading city in the country for office spaces. Choosing a specific zone is of course crucial in any city, and we recommend getting to know the neighborhoods you’ll be looking into. To get a sense of which zones or neighborhoods in Tel Aviv might suit you best, here is a short description of areas in demand and general rates, to help put things in a wider perspective:
We’ll start with offices in the up-and-coming Montefiore neighborhood, located a walking distance from the train station and the Azrieli towers. This zone is characterized by its short industrial buildings and Sderot Yehudit St. which runs through its center. In this area you’ll find designer lofts and offices, mostly ranging in size from 60m² to 180m² and priced between 40-60 ILS/m².
Another highly-demanded zone is of course the center of Tel Aviv (“The City” area), which extends from the court houses to the east and runs through Dubnov, Shaul HaMelech, Ibn Gvirol, Shlomo Hamelech, and Ben Gurion streets, all the way towards Dizengoff Center. This area is ideal for those who practice free professions or law, and it offers a variety of offices for rent in decent buildings, in sizes between 50-250m² and for prices ranging between 70-110ILS/m².
The area south of the city center is also popular among office renters. This area starts at Yitzhak Sadeh and Hamasger streets and continues south-west towards the Neve Zedek area, where you’ll find major banks, the Stock Exchange, and many large corporations, as well as Tel Aviv’s historic streets Rothschild, Ahad Ha’am, Shenkin, Montefiore, and so on. This area features designer offices in well-conserved buildings, in tower blocks, or in low, organized office buildings. Sizes: 60-400m²; prices: 60-100 ILS/m².
Offices for rent can also be found in the north of Tel Aviv, starting at the Yarkon area and spreading north. Most offices are located in Ramat HaHayal, Ramat Gan’s Diamond Exchange District, and the surrounding area. Sizes: 40-400m²; prices: 50-75 ILS/m².
Another popular area is the “Old North,” though offices there are scarce and mostly found in residential buildings (parter floor) located north of Alrozorov St. and up to the bank of the Yarkon river.
Those are all things you might want to keep in mind before continuing your search, and of course, nothing beats seeing with your own eyes, so it’s best to go have look at as many properties as you possible. That always contributes to your idea of what might work. We recommend rating these factors, ranking your most uncompromisable topic first and so on, to make your search more focused and efficient. Needless to say, there are many more variables that can help you find a new home for your company, for the best price and in the area most suited for you. We invite you to contact us with any questions you might have and we’ll be happy to assist you, free of charge.
Best of luck!
The MISRADIM Team