Marom Tower, Floor 31 = Class A+ / trophy, upper-tier prime

• New 40-floor tower in the Jerusalem Gateway district, first high-rise delivered in the new CBD and tallest office tower in the city.
• Directly on top of Navon high-speed rail (32 minutes to Tel Aviv), adjacent to the central bus station, at the junction of three light-rail lines – the most connected site in Israel.
• Upper-third floorplate (31 of 40) with panoramic views, strong natural light, and clear high-floor rent premium vs mid and low floors.
• Full Class A fit-out budgeted and underwritten at high institutional standard.
• Target tenant profile: government-adjacent institution, NGO / think tank, financial or tech, with 10-year lease – exactly the occupier set expected in a prime CBD tower.

• Floor Area: 1,433 m²
• Deal Basis: ₪21,000/m²
• Parking: 5 spaces
• Fit-Out: Full Class-A buildout

Definitions

Class A: New or fully renovated, high-spec building in a prime location: modern systems, large efficient floorplates, high ceilings, good natural light, structured parking, professional management.

Class A+ / Trophy: Landmark tower in the prime CBD, usually tall, best specs, direct rail access, top tenant mix, and architectural or symbolic prominence (ToHa, Azrieli Sarona in Tel Aviv; Marom / Gateway in Jerusalem).

Class B: 80s–2000s stock, decent shell but older systems, smaller or less efficient floors, usually mid-rise or fringe prime. Can be upgraded to A with heavy capex.

Class C: 30–40 year old buildings, functional obsolescence, mediocre access and parking, basic lobbies or none, often industrial or converted stock; tenants are small services, logistics, cheap back office.

How that maps by city

Jerusalem

• Class A / A+: Gateway / City Entrance (Marom, future towers). Newer towers in Har Hotzvim and selected projects in Talpiot and Givat Shaul.
• Class B: Most existing stock in Givat Shaul, large parts of Har Hotzvim, parts of City Center.
• Class C: Older Talpiot industrial, fringe City Center side streets, older low-rise office blocks.

Tel Aviv / Herzliya / others (High Level)

• Tel Aviv CBD / Yigal Alon / Menachem Begin: A+ towers: ToHa, Azrieli Sarona, Midtown etc. A: modern towers along Menachem Begin, Yigal Alon, Hassan Arfa. B/C: older mid-rises and peripheral buildings.
• Herzliya Pituach: A: modern campus-style parks and seafront towers. B/C: older low-rise tech parks inland.
• Haifa, Ramat Gan, Petah Tikva, Be’er Sheva: A: new business parks or towers (Matam in Haifa, Bourse in Ramat Gan, Kiryat Aryeh in Petah Tikva, new civic/hi-tech schemes in Be’er Sheva). B/C: older city-center stock and industrial zones.

A / A+ Core
Gateway / City Entrance – new CBD, Marom and peers at the top of the pyramid.
Prime Har Hotzvim – Intel / Mobileye / Cisco area, modern R&D campuses.

B Majority
Givat Shaul – traditional office district, many B assets with pockets of A.
Parts of City Center – renovated projects along Jaffa / King George.

C / Value Add
Older Talpiot – legacy industrial sheds and basic offices.
Fringe City Center side streets – small obsolete buildings needing heavy capex.

Within Marom

Floor 31 is upper third, so above mid-stack rents and well above podium or low-rise equivalent space. High floor gives strongest view/light premium and best defensiveness on re-letting.

Versus other Gateway towers

Gateway Class A baseline: roughly 100–105 ₪ per sqm per month on average floors. High floors in first towers are projected 120–130+ with additional scarcity premium; Floor 31 should sit at the top of that internal range.

Versus Har Hotzvim / Givat Shaul / Talpiot / City Center

• Har Hotzvim A: about 85–95 rent, strong but tech concentrated.
• Givat Shaul: roughly 70–100 depending on building and renovation.
• Talpiot: 70–75 in older stock, 100+ only in new schemes.
• City Center mixed: 80–95 for better assets.

Floor 31 sits clearly above all of these, as the top institutional product in the city.

• Intrinsic market rent after fit out used in the model: 148 ₪ per sqm per month.
• Herut subsidized rent used in the model: 98.5 ₪ per sqm per month (about 33 percent discount).

Given the comps, one clean band for investor communication is:

• Conservative: 130 ₪ per sqm per month
• Base: 148 ₪ per sqm per month (model value)
• Aggressive: 155–160 ₪ per sqm per month

Using:

• Tel Aviv prime top-tier CBD range 180–200 rent on the best Rothschild / ultra-prime stock.
• Marom Floor 31 market rent 148.

Ratio: 148 / 200 ≈ 74 percent of absolute Tel Aviv prime.

• 2025 Class A average: about 107.5 rent and 17,000 sale price per sqm.
• 2025 Class B average: about 82.5 rent and 13,500 sale price per sqm.

Gateway A+ (Marom and peers) is positioned above these averages, both in rent and sale price, but still clearly below Tel Aviv prime.

Per sqm and total (ex VAT)

With VAT

The model applies 18 percent VAT to the relevant components and arrives at:

• Total all-in with VAT: 48,471,804
• All-in cost per sqm with VAT: about 33,825 per sqm.

Presentation:

• Economic cost (ex VAT, if VAT is recoverable): ~41.3M shekels.
• Gross capital at risk including VAT (if not recoverable): ~48.5M shekels.

True all-in basis (including fit out)

• All-in cost (ex VAT): 41,341,380
• All-in cost (with VAT): 48,471,804

Market level, using 148 rent:

• Market rent income: 2,545,140 per year.
• Market NOI after reserve: 2,417,883 per year.

Herut level, using 98.5 rent:

• Actual rent income: 1,693,806 per year.
• Actual NOI after reserve: 1,609,116 per year.

Yields on true all-in cost

Table 3 – Market vs Herut (ex VAT all-in)

Annual philanthropic differential: Difference in rent: about 851,334 per year (ex VAT view). This is the amount that can be structured as a charitable contribution, subject to tax advice.

Average residential gross yield in central Jerusalem sits around 2.7–3.0 percent, while stabilized commercial Class A yields, once capex is included, are in the 4.5–6.0 percent range depending on quality and leverage.

So a 4–6 percent commercial yield on a prime floor in the new CBD is clearly attractive relative to owning apartments in the same city.

14.1 Subsidized-rent model (not recommended as headline)

Herut pays below-market rent; the discount equals the donation.

• Advantages: feels like “one integrated gift”.
• Risks: Harder to prove market rent every year for tax. Potential scrutiny on valuation and rent gap. Lease and donation are entangled, which complicates enforcement if something goes wrong.

14.2 Clean model (recommended)

Herut pays full market rent on a normal commercial lease. The investor makes a separate cash donation each year (or up front) to Herut or to an American Friends 501(c)(3) / Section 46 vehicle.

• Advantages: Clear market lease, easy to appraise and finance. Donation is clean, documentable, and ring-fenced for tax. If Herut ever leaves, the floor simply reverts to a standard Class A lease at market levels.

Israeli corporate tax

• Confirmation that rent at 148 is accepted as market for Gateway high-floor space.
• Treatment if Herut pays below that in any year.

Israeli VAT

• Can the acquisition VAT and fit-out VAT be fully recovered by the SPV.
• Ongoing VAT on rent and its treatment for the donor entity.

Donation recognition in Israel

• Herut’s precise Section 46 status.
• Whether the rent differential or separate cash gift is recognised as a charitable donation.

US side via American Friends entity

• Structure for a US taxable investor using a 501(c)(3) to receive donations.
• Requirements for independent appraisal, contemporaneous acknowledgment, and documentation of the gift.

Cross-border issues

• Any risk of double taxation or limitation on foreign charitable deductions.

Tel Aviv

• Highest office prices in the country.
• Short term: heavy pipeline (about 530k sqm under construction) and elevated vacancy, especially outside the very best towers.
• Yields on prime offices roughly 3.1–3.2 percent, compressed by global capital and tech demand.
• More volatile, more cyclical, deeper liquidity.

Jerusalem

• Smaller, more measured office pipeline (around 150k sqm under construction now, 1.2–1.5m sqm by 2035).
• Class A occupancy near 95 percent, with Gateway and Har Hotzvim the tightest nodes.
• Yields on quality assets in the 4–5+ percent range, higher than Tel Aviv for similar building risk.
• Driven by government, institutions, NGOs, and growing tech, not only by pure office arbitrage.

By city (prime core, well-let assets, gross yields before VAT)

• Tel Aviv prime office: about 3.1–3.5 percent
• Tel Aviv logistics: around 5–6 percent
• Jerusalem prime office: 4–5 percent (Marom A+ slightly lower on a pure yield basis but with more growth)
• Haifa / Krayot office: 5–6 percent
• Herzliya Pituach office: 4–5 percent
• Ramat Gan Bourse office: 4–5 percent
• Petah Tikva office/logistics: 5–6 percent
• Be’er Sheva logistics and mixed use: 6–7 percent

By sector (national bands)

• Prime office A+/A: roughly 3–5 percent depending on city.
• Secondary office B/C: 5–7 percent, but with heavier capex and higher risk.
• Logistics: 5–7 percent.
• Retail high street: wide band 4–7 percent depending on location and tourism risk.
• Hotels: highest yields, reflecting tourism volatility and war risk.

• Gateway / City Entrance: Highest rents, best connectivity, government relocations, true CBD.
• Har Hotzvim: Tech and R&D campus, strong occupier story but sector-concentrated.
• Givat Shaul: Stable, professional services, mostly Class B, value add via renovation.
• Talpiot: Long term mixed-use play, medium-term mess, big potential if zoning and rail fully materialize.

Why Gateway / Marom is top node

• Only node with high-speed rail plus three light-rail lines plus central bus in one place.
• Heter for tall buildings and a full master plan for 20+ towers and mixed uses.
• Natural landing spot for ministries, quasi-government, NGOs, financial institutions.
• Symbolic entrance to the capital with strong branding value for donors and institutions.

• The light-rail network makes Gateway the only non-car-dependent CBD in the country.
• Urban renewal in Talpiot, Wadi Joz and City Center pushes older tenants to modern stock, including Gateway.
• Offices relocating from Tel Aviv for tax, political and branding reasons want the capital city but need quick TLV access, which only Gateway gives.
• Capital-city symbolism and proximity to the government quarter have intangible value for donors and institutions that do not show directly in NOI.

Timed scenarios

Year 10 – lease rollover point

• Option 1: renew with Herut at full market rent, then refinance or sell at institutional cap rate.
• Option 2: re-lease to another A-grade tenant at market rent, then sell.

Year 20 – fully matured district

• Gateway built out, rail network fully operating, capital appreciation largely realized.
• Exit to REIT, insurer, or pension fund as a stabilized core asset.

Hold and refinance

• If cap rates tighten or NOI steps up, refinance to extract equity while keeping title.

Optionality section

• Additional floors or combinations if other donors or tenants want a full “Herut campus”.
• Space can be re-let to government, NGO, tech, financial, or professional services – generic Class A office, not special use.
• Retail or mixed-use conversion unlikely inside this tower, but podium retail in Gateway as a whole provides campus amenity.
• A stabilized high-floor in the leading CBD tower is exactly the sort of asset REITs, insurers and pension funds aggregate over time.

You now have:

• A clear Class A/B/C framework and city / sector benchmarks.
• A precise all-in cost (ex VAT and with VAT) tied directly to your final Excel.
• A chosen headline yield: net yield on true all-in cost ex VAT at market rent, 5.8 percent.
• A clean comparison between market and Herut subsidized economics.
• Macro narrative: Tel Aviv vs Jerusalem, and why Gateway is the safest node in Jerusalem.
• Risk, tax and exit sections already structured in investor language.