Introduction
Offices on the 2nd floor and higher floors often appeal to companies that value privacy, quieter surroundings, and separation from heavy street traffic. This guide outlines the market dynamics, pricing, and practical trade-offs for tenants and investors considering such office spaces in Israel.
Current Market Landscape
The segment for mid-level office floors sits between ground-level retail-driven units and high-rise premium towers. Demand is steady from professional firms, start-ups, and service providers seeking balance between cost and accessibility. Supply varies by city, with central business districts offering more options while suburban areas lean toward low-rise buildings.
Price Analysis
Rental rates generally fall in the mid-range of the office spectrum. Average asking levels often span from ₪70–₪120 per m² in core urban areas, with peripheral regions trending lower. Recent years show moderate upward pressure, driven by limited availability in central locations and increased demand from small to mid-sized firms.
Inventory and Demand
These offices are moderately available, more so in established urban corridors than in industrial parks. Tenants typically include law firms, consultancies, clinics, and tech teams seeking cost efficiency with professional presentation. Demand peaks in the post-summer period as businesses plan relocations for the new fiscal year.
Key Neighborhoods
- Tel Aviv CBD: Dense supply, high visibility, and proximity to transport nodes.
- Ramat Gan Diamond District: Attractive for financial services and professional offices.
- Herzliya Pituach: Popular with tech and multinational firms, mid-rise stock available.
- Jerusalem City Center: Mix of older and newer office floors, draws institutional tenants.
- Haifa Downtown: Competitive rents, serving regional service providers.
Ideal Buyer/Renter Profile
Typical occupiers are small to medium-sized firms that need professional space without the premium of top-floor towers. They value functional layouts, manageable service charges, and proximity to clients or transit routes.
Advantages of Offices on the 2nd Floor and Above For Rent
- Reduced street noise and greater privacy compared to ground-level units.
- Often priced below high-floor landmark offices, offering cost balance.
- Better security and controlled access than street-facing premises.
- Potential for flexible fit-outs in mid-rise buildings.
Disadvantages and Challenges
- Accessibility concerns for visitors if elevators are outdated or absent.
- Less visibility compared to ground-floor spaces, limiting walk-in exposure.
- Older stock may require renovation, raising upfront costs.
- Parking shortages in dense urban areas can deter some tenants.
Practical Considerations
- Monthly expenses include Arnona (municipal tax) and Va’ad Bayit (common charges), varying by building size and age.
- Investment outlook: rental yields (תשואה) are typically mid-level, with appreciation potential tied to location and tenant demand stability.
- Check building permits for office use, as mixed-use properties may have restrictions.
- Assess technical infrastructure—air conditioning, elevators, and parking availability can significantly impact tenant decisions.
Market Comparisons
Compared to ground-floor offices, upper-floor units trade visibility for quieter, more professional settings. Versus top-floor towers, they are more affordable and accessible, though without the prestige or panoramic views. The choice depends on whether cost efficiency or branding value is the primary driver.
Frequently Asked Questions (FAQ)
Question: Are 2nd-floor offices suitable for client-facing businesses?
Answer: Yes, if accessibility is adequate and signage is clear, they work well for consultancies and service providers.
Question: Do these offices generally include parking?
Answer: Parking is not guaranteed; central areas often have limited spaces, while suburban complexes provide better options.
Question: How stable are rents in this segment?
Answer: Rents are relatively stable, with gradual increases in high-demand cities and slower changes in peripheral regions.
The Expert Take
Offices on the 2nd floor and above strike a practical balance between affordability and professionalism, making them a strong fit for many small to mid-sized companies. While they lack the prestige of penthouse floors, their value proposition is clear in today’s market. Investors and tenants should weigh location, building quality, and ongoing expenses before committing. Contact our real estate specialists for a personalized consultation.
