After Facebook’s departure, Riverside and Masterschool move into Azrieli Sarona
The two startups lead a wave of new tenants taking over prime floors at higher rents.
After Facebook vacated the Azrieli Sarona Tower in April of this year, Azrieli has been working to fill the empty offices, a difficult task in today’s office market. Calcalist has learned that the company recently signed seven new leases in the tower, covering a total of approximately 18,000 square meters, or about 60% of the 33,000 square meters previously occupied by Facebook.
Meta, Facebook’s parent company, first leased 24,000 square meters in Azrieli Sarona in 2017, spanning 10 floors of the tower. About three years later, Meta expanded its lease to 33,000 square meters across 12 floors. In April 2022, Meta announced it had signed with AFI Properties and Melisron to lease 20 floors in the Landmark project. Today, Meta employees occupy 13 of those floors, with the remaining seven subleased to other tenants. In Azrieli Sarona, Meta still holds about 2,500 square meters, signed under a later agreement, which is expected to be vacated at a later stage.
As part of its exit from the tower, Facebook paid Azrieli NIS 14 million in compensation for one month’s lost income, after deducting rent received from replacement tenants.
An analysis of the new deals indicates that rents per square meter are higher than those previously paid by Meta. This suggests that Facebook’s departure actually created a strategic opportunity for Azrieli to maximize the tower’s potential in the shifting office market. According to estimates, Meta paid an average of about NIS 120 per square meter, while new tenants are reportedly paying up to NIS 180 per square meter.
The surge in demand led to quick signings on favorable terms, and Azrieli reports strong interest in the remaining space, with further negotiations underway.
Among the new tenants: podcast technology company Riverside leased the 31st floor (about 2,400 square meters) and half of the 32nd floor (1,200 square meters), totaling 3,600 square meters, for four years with an option for another four. Masterschool, a startup that enables the launch of tech training schools, leased the 48th floor (about 2,400 square meters) for 40 months with an option for another three years.
The Azrieli Sarona Tower rises 255 meters with 61 floors and approximately 120,000 square meters of office space above 11,000 square meters of commercial space. It recently received the LEED Platinum certification, the highest standard for green building and operations, making it the first project in the Middle East and North Africa to achieve this distinction.
