In the case of properties being
offered for lease, prices are quoted in terms of dollars
per meter per month, for example, a 200 meter office in
downtown Tel Aviv might rent for $20 per meter, or
$4,000 per month.
Lease payments are
generally linked to the Israeli rate of inflation, which is
published
on a monthly basis by the Central Bureau of Statistics.
It is sometimes possible to negotiate a lease linked to the dollar exchange
rate, or to the dollar plus the U.S. Consumer Price Index.
In addition to the
rent, a tenant pays city taxes, building maintenance fees for care
of the common areas, all utilities and VAT.
Most leases
are executed for periods of up to ten years, the lease
being divided into an
initial period and option periods thereafter, which the tenant
can exercise with advance notice. Rents are generally paid on a monthly
or quarterly basis, and tenants are often required to post a guarantee
in the form of a cash deposit or bank guarantee equivalent to 3-6 months
rental obligation.
Most commercial
leases of office space include landlord executed or subsidized
tenant improvements. Most deals of this nature are for a
minimum of
five
years as the landlord invests $250 - $350 per square meter for tenant
improvements. Property leased as a shell will rent for $3 - $4 per square
meter
less than finished space, but will require a significant investment
by the tenant.
