Structuring an innovative agreements to reduce risk, limit exposure and deliver outstanding returns for buyers in Tel Aviv and Netanya.
Situation
We represented groups of purchasers in two major residential development projects – one in Tel Aviv and another in Netanya.
Our Role
In Tel Aviv, we negotiated terms that were highly unusual for the market at that time. Buyers acquired 42 apartments at the pre-sale stage, with prices fixed and not linked to the construction input index. Payment terms meant purchasers provided only 7 percent at signing and 13 percent upon receipt of the building permit, with the balance due only upon completion. This structure gave buyers early entry at discounted prices while shielding them from inflationary risks.
In Netanya, we crafted an even more innovative arrangement. Purchasers committed 20 percent by the permit stage, but we secured bank financing for 15 percent of that amount, repayable only upon completion, with the developer covering interest. Effectively, buyers paid just 5 percent upfront, with the balance on delivery. We also structured an option allowing certain purchasers to walk away by forfeiting only the 5 percent deposit. Prices again remained fixed at nominal levels, insulating buyers from cost inflation.
Outcome
In Tel Aviv, clients who initially invested around ILS 400,000 were required to add only ILS 2 million upon completion four years later. At handover, apartments could be sold on the open market for approximately ILS 3.2 million. Clients effectively tripled their initial investment while avoiding exposure to rising construction costs. The Netanya project remains ongoing but provides minimal upfront exposure, capped downside risk, and the potential to capture full market upside. These transactions demonstrate how, by consolidating purchasers and applying thoughtful negotiation, we secured terms no single buyer could have achieved on their own.