Finding its center

Parts of downtown Tel Aviv might be dilapidated, but the prices are still sky high.

By JOHN BENZAQUEN
Boardwalk (photo credit: goisrael.com)
Boardwalk
(photo credit: goisrael.com)
Downtown Tel Aviv – bordered by the Mediterranean Sea to the west, Ibn Gvirol Street to the east, Allenby Street to the south and Dizengoff Square to the north – was once the city’s economic, commercial and cultural center, as well as its most upscale, expensive residential area.
All this started to change in the ’50s as the city’s center of gravity began shifting northward. The fashionable stores were the first to move, followed by residences.
Now, however, there is an opposite trend, at least with regard to the residential areas.
It started in the late ’80s with the renewed international interest in the Bauhaus style of architecture. Though the architectural style of downtown Tel Aviv is eclectic, the dominant one there is Bauhaus. As a result, Tel Aviv has become the Bauhaus capital of the world.
The style, which originated in Germany, is based on clean, curved lines and making use of the forces of nature, including positioning a lot of windows to maximize light and air flow. The design is meant to be simple and pleasing to the eye.
During the years between 1925 and 1940, thousands of such buildings were constructed all over Germany. In the ’30s and in the aftermath of Hitler’s rise to power, the number of Jews emigrating to Palestine from Central and Eastern Europe increased, and they brought the architectural style with them.
Bauhaus buildings were constructed in Jerusalem and Haifa as well, but mainly in Tel Aviv.
The reason Tel Aviv has become the Bauhaus mecca for architects from the four corners of the globe is Britain’s Royal Air Force, and later the US Air Force, which flattened Germany’s cities during World War II. They practically destroyed most, if not all, of the Bauhaus buildings, leaving Tel Aviv to become the global center of this architectural style.
The increased interest in Bauhaus properties in the area increased their value. Entrepreneurs started buying whole buildings, restoring them and selling the apartments at premium prices. As a result, the area became fashionable; higher-income families started moving in, and the whole area was upgraded.
“These days, downtown Tel Aviv is definitely in,” says Shaul Asulin, the Re/Max concessionaire in the city. “What is now called the White City – that area of Tel Aviv built during the ’30s and ’40s of white Bauhaus buildings – is very much in demand. Since supply is very limited – [there are] practically no new developments – and demand is brisk, prices tend to go up and up.”
Prices are currently steady with a tendency to rise because of the present state of the real estate industry, but Asulin believes that prices will go up in the future. This is especially the case in the peripheral areas downtown, where expensive luxury high-rise apartment blocks are being built.
These are a contrast to the existing buildings, which are mostly old, no more than three stories high and sadly run down. Built in the ’20s and ’30s, most are not well-maintained. During World War II, the British froze rentals all over the British Empire, then encompassing a quarter of the world’s surface and population, to prevent speculation during the war years. The law was continued after the establishment of the State of Israel in 1948. This meant that the property was in practice expropriated. The landlords got miserably low rents and could not afford to make repairs, and the properties decayed.
This holds true to this day.
Today, the real estate in downtown Tel Aviv can be roughly divided into four categories:1. Apartments in old, badly maintained buildings;2. Apartments in old buildings that have been well maintained;3. Apartments in restored period buildings;4. Apartments in the new, multistory buildings.
The experts of Metropolitan Real Estate, which specializes in downtown Tel Aviv, told Metro that real estate prices for apartments in the area cost from $9,000 to $15,000 per square meter. A penthouse can cost over $20,000 a sq.m.
A two-room, 60-sq.-m. apartment in an old, dilapidated building can cost NIS 1.6 million. A three-room apartment can cost NIS 1.9m., and a four-room apartment NIS 2.2m. A rooftop apartment, which means a smallish two- or three-room apartment on a roof, can cost NIS 2.5m.; such apartments have neither parking nor an elevator and are usually on the third or fourth floor.
In an old building that isn’t dilapidated, the price for apartments like these can go up an additional 5%. In a restored building, they can go up by 20% or more.
At present, two- or three-room apartments are much in demand among overseas buyers. For these buyers, the nearer to the sea, the better, and prices tend to rise for properties located west of Rothschild Boulevard.
The area is also much in demand among locals. Bohemian types prefer it, while yuppies tend to acquire the more expensive apartments in renovated buildings, where a penthouse can cost over $2m.
In addition, the area is home to a large number of new high rise developments. The first such development, called Lev Tel Aviv – “the heart of Tel Aviv” – was constructed over 10 years ago. Other high-rise developments, such as the White City Tower, the Habas Tower at the beginning of Rothschild Boulevard, 30 Rothschild Tower and now the Meyer – a 39-story building on the corner of Rothschild and Allenby – add luster to the area.
The potential clients for these high-rise buildings are very affluent, whether locals or overseas buyers.
On the first 20 floors, the apartments in the Meyer or 30 Rothschild Tower are “standard” prices, ranging from $15,000 to $20,000 a square meter. The higher floors are for the very wealthy. Each floor is divided into four 200-sq.-m. areas and sold as space. The buyers can then arrange them as they see fit.
A buyer from France bought a triplex for NIS 90m., and a Russian gentleman is in the process of buying the top floor apartment for NIS 200m.