Nochi Dankner Seeks to Sell Jerusalem Office Building Amid Bankruptcy Proceedings

Businessman Nochi Dankner is in the process of selling his last major real estate asset, the Beit HaShenav office building at 12 Beit HaDfus Street in Jerusalem's Givat Shaul neighborhood, as part of bankruptcy proceedings. The building, inherited from his father’s estate, currently serves as office space leased primarily to government entities including the Family Court, Traffic Court, Planning Administration, Real Estate Enforcement Authority, Government Vehicle Administration, and Government Housing Administration. Smaller tenants include lawyers and other professionals.

Dankner informed the court that the property, divided into three wings with a total office area of 12,255 square meters, is up for sale to help settle his debts with creditor banks. In September 2023, he sold 622 of the building’s 656 parking spaces to the Sifra Parking Fund, with an initial sale of 470 spaces for approximately 52 million shekels. Rental prices for offices in the building range around 70 shekels per square meter, with some offices leased for as low as 62 shekels per square meter.

According to Dankner, the property includes long-term leases to the Government Housing Administration until 2037 and rights for additional construction of 40,000 to 53,000 square meters. He estimates the building’s value at 420 to 500 million shekels before taxes and improvement levies, with remaining proceeds to be split equally between him and his sister. Dankner expressed optimism about renewed buyer interest once the bankruptcy disputes subside.

However, real estate experts caution that selling such a large, aging office building in Jerusalem will be challenging due to an oversupply of office space and the building’s outdated condition, limited parking, and less desirable location. The government tenants currently anchor the building, but some ministries are relocating to newer offices, potentially reducing its value unless redevelopment occurs.

There is potential for rezoning part of the property for residential use, which Dankner estimates could cover about 20,000 square meters. This could be more profitable given residential prices in the area reach around 38,000 shekels per square meter. Yet, the city’s master plan designates Givat Shaul primarily for commercial and office use, meaning a developer would need patience and resources to secure a zoning change and undertake redevelopment.