Subscribe to Print Edition | Wed., September 24, 2008 Elul 24, 5768 | | Israel Time: 02:27 (EST+7) web haaretz.com   Back to Homepage Haaretz Toolbar Diplomacy Defense Jewish World Opinion National Print Edition Car Rental Books Haaretz Magazine Business Real Estate Easy Start Travel Week's End Anglo File

Demand wilting for TA office space By Raz Smolsky and Arik Mirovsky Tags: economic crisis  The office rental market had only just begun to recover from the explosion of the high-tech bubble early this decade before, and it now seems to be on the verge of a second crisis. Industry sources speak of a price drop of at least 10%-15%. High-tech propelled the office rental market in the late 1990s, leading to the construction of many office towers, especially in Tel Aviv and the area of the Israel Diamond Exchange in Ramat Gan, which fetched top rates. Notable among these were the Azrieli and Levinstein towers. But when the bubble burst in 2001 demand for office space fell, catching about 10 towers in mid-construction. Developers saw rent rates drop 30%-50%. Excess supply in Tel Aviv alone reached an estimated 300,000 square meters, which industry observers at the time said could take years to fill. But by mid-2005 the market began to swing. Demand initially increased, but since supply remained plentiful rents remained unaffected. By 2006, however, rents jumped 10%-15%. Advertisement Since then the market has soared. The average rent is NIS 92 per sq. meter, with prime properties going for as much as NIS 140, reaching or even exceeding the high-tech bubble era. Industry sources say the market has slowed in recent months. "The first signs of a crisis began in late 2007, with international firms and high-tech companies showing poor results. It worsened in mid 2008," Gilad Bdolah of Bdolah Real Estate Marketing said. Bookmark to del.icio.us   Iranian suspects Argentina asks Iran to hand over suspects in 1994 Jewish center bombing. Einstein's telescope Physicist's telescope renovated and on display to the public at Hebrew University.

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