Google inks record-breaking $300 million Tel Aviv rental deal
Google inks record-breaking $300 million Tel Aviv rental deal
The largest office rental agreement in Israeli history will see the tech giant rent approximately 60,000 square meters in the ToHa2 tower in Tel Aviv, set to open in 2027
About a year and a half after initial reports, Google has finalized a landmark deal to lease approximately 60,000 square meters in Tel Aviv's ToHa2 Tower. This joint transaction with Gav Yam and Amot includes several hundred parking spaces and spans a decade (with a one-time exit clause after five years), with an annual rent of NIS 115 million (approximately $30 million). The lease begins in early 2027, coinciding with the completion of ToHa2’s construction. This move will see Google expand significantly from its current Electra Tower offices, relocating 2,000 employees and marking the largest office rental deal in Israel’s history, both in terms of space and rental value.
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Toha2.
(Architecture: Yashar Architects and Ron Arad Architects. Illustration: Viewpoint)
Google's lease in the Electra Tower is expected to end at the same time as the ToHa2 agreement begins, and industry estimates suggest that Google will terminate the Electra lease and move its employees to the new ToHa2 tower.
According to Gav Yam's report, the construction of the ToHa2 tower is in progress, with about 40% of the skeleton work completed according to the planned schedule. The scope of the areas that Google will rent, as well as the price, indicate the company's expansion. In the initial report about a year and a half ago, there was talk of renting 55,000 square meters at a rent of NIS 105 million per year.
The ToHa2 tower is located on the Yigal Alon axis next to the ToHa1 tower and near the central train station. The tower, which is currently under construction, will have 77 floors with an area of 2,500-3,000 square meters per floor, totaling about 160,000 square meters. Google's rental deal covers about 24 floors, approximately a third of the tower's area.
About 20,000 people will work in the two towers (1 and 2). Due to the proximity to public transportation hubs, including the light and heavy rail as well as two adjacent metro stations, and in light of the planning bodies' policies, the number of parking spaces will be limited to about 1,500 spaces. The cost of the project is estimated at 3 billion shekels ($810 million), and the income from renting it is currently estimated at 280 million shekels ($75 million) per year.
Google has been located in the Electra Tower since 2011. Initially, it rented about 8,000 square meters and later expanded to rent about 1,500 more square meters. The space it is about to rent is more than five times larger than its current space. The company currently employs about 2,000 people and, based on the large area it is renting, it intends to expand significantly in the future.
This is the largest office rental deal signed so far in Israel, both in terms of office space and price. The closest deal to it is that of Facebook, which rented about 51,000 square meters for about NIS 100 million a year. Microsoft rents a campus in Herzliya with an area of 44,000 square meters for NIS 50 million a year, less than half the amount that Google will pay. Another significant deal is that of Wix, which will move to 30,000 square meters in Glilot for an estimated NIS 40 million per year.
