Real Estate Developer CEO: Agreement Changes Essential for Project Survival
Translated & summarized from Globes by baba
Tomer Reifman, CEO of Ya'az Entrepreneurship, stated that property owners must renegotiate urban renewal project agreements due to market shifts. In Tel Aviv, owners are contributing hundreds of thousands of shekels or forgoing rent to enable projects. Reifman noted that rising construction costs and falling prices necessitate these changes, with concessions averaging NIS 500,000 per apartment. Despite improved sales, the company reported a significant net loss in early 2026.
The story in 6 lines · by baba
- Property owners must renegotiate urban renewal agreements for projects to proceed, according to CEO Tomer Reifman.
- In Tel Aviv, apartment owners are contributing up to NIS 250,000 or foregoing rent to advance construction.
- Concessions average NIS 500,000 per apartment in central Tel Aviv, sometimes reaching NIS 1 million.
- Rising construction costs and falling apartment prices are the primary drivers for renegotiations.
- Ya'az Entrepreneurship reported a net loss of NIS 12.3 million in the first half of 2026.
- The company's stock has declined, partly due to low trading volume and market price drops.
Tomer Reifman, CEO of Ya'az Entrepreneurship, stated that property owners must be willing to renegotiate agreements for urban renewal projects, as current market conditions make original terms unfeasible. In one project in Tel Aviv, apartment owners contributed approximately NIS 250,000 each to advance construction. In another, they agreed to forgo rent payments during construction, a concession valued at around NIS 300,000 per apartment.
Reifman explained that the difficulty in selling apartments in Tel Aviv and stagnant prices necessitate these adjustments. He emphasized that "Whoever doesn't understand that to get a project off the ground, they need to change the agreement, won't have a project." In central Tel Aviv, these concessions average NIS 500,000 per apartment, sometimes reaching NIS 1 million.
Ya'az Entrepreneurship, which focuses on urban renewal in Tel Aviv and manages dozens of projects, has seen its business model challenged by rising construction costs and falling apartment prices. Reifman has returned to dozens of previously signed projects to amend terms, noting that over ten projects have reached new agreements. These renegotiations often involve reducing promised apartment size, lowering rent compensation, or adjusting specifications.
Reifman highlighted that even with these adjustments, apartment owners still benefit from significant value appreciation, alongside the crucial upgrades of safe rooms and reinforced buildings. The company itself operates on lower profit margins, around 15%, and includes clauses for compensating owners if market prices rebound significantly during construction.
Despite reporting improved sales in recent quarters due to these adjusted pricing strategies, Ya'az Entrepreneurship recorded a net loss of approximately NIS 12.3 million on revenues of NIS 23.1 million in the first half of 2026. The company's market value is around NIS 142 million, with its stock experiencing declines attributed partly to low trading volume and market price drops.