Investor Unites Neighborhood in Arad to Salvage Real Estate Project Amid Rising Costs
In the mid-2010s, real estate investor Yoav Lerner targeted a tender by the Israel Land Authority (Rami) for 226 plots in northeast Arad, aiming to build ground-level homes with scenic views of the Dead Sea. Although he initially won a desired plot, the tender was canceled due to low competition. When the tender reopened in 2021 under the name "Nofim," Lerner submitted updated bids amid a surge of about 2,000 offers, mostly from investors attracted by the opportunity to build up to six desert guest units per plot.
Lerner, a 42-year-old real estate appraiser and entrepreneur from Rehovot, purchased five adjacent plots with family members for approximately 1.38 million shekels each (excluding VAT). His plan was to develop a mini-project of 30 guest units and five villas, leveraging the large plot sizes and tourist-oriented zoning. However, after winning and paying for the plots, construction stalled due to rising interest rates starting in April 2022, which increased financing costs, and the October 7 security events that halted Palestinian laborers from working in the area, driving up building expenses.
Despite these challenges, Lerner actively expanded his holdings to 16 plots and rallied about 50 other plot owners to collaborate on a residential and vacation project. He invested nearly 100,000 shekels in planning and engaged with Arad’s municipality, where Mayor Yair Maayan approved zoning changes allowing multiple residential units and guest accommodations per plot to incentivize development.
Maayan emphasized that the "Nofim" neighborhood is distinct from the rest of Arad, positioned as a tourist area with large plots suitable for unique micro-villa projects with private pools. He projects that by 2030, 50 homes will be built, with 80% occupancy by 2035. Lerner remains optimistic, negotiating with major developers and believing that despite ongoing financing costs and delays, the plots’ current estimated value of around 3 million shekels each will prevent losses for owners once the project materializes.
Lerner also noted the limited appeal of such projects to developers due to their relatively small scale, but he is determined to turn the setbacks into an opportunity for a distinctive desert real estate venture. He highlighted that the southern market, including Arad, has been flooded with ground-level plots, reducing investment potential compared to more central locations.
Summary: Real estate investor Yoav Lerner assembled multiple plots in Arad’s "Nofim" neighborhood to develop a unique tourist housing project. Despite rising interest rates and labor shortages delaying construction, Lerner continues to expand the project and work with local authorities, confident the investment will eventually yield returns.
