Why major developers are giving up on apartments in towers
Major real estate developers in Israel, including the Azrieli Group, are abandoning residential apartments in mixed-use towers. The reasons include expensive engineering challenges, management conflicts between residential and business tenants, and a negative premium in apartment prices compared to pure residential towers. Developers are shifting to a horizontal model of separate towers.
Major real estate developers in Israel, including the Azrieli Group, are giving up on residential apartments in towers that were planned as mixed-use projects. The article examines the reasons for this phenomenon, focusing on the example of the Moshe Aviv Tower in Ramat Gan, where a 3-room apartment was sold for 3.1 million shekels — a price significantly lower than apartments in pure residential towers. Developers face expensive engineering challenges, such as different infrastructure for residential and office use, and management conflicts between residential tenants and business owners. The article notes that Israeli law is not adapted for the coexistence of offices and residences under one roof, and that developers are moving to a horizontal mixed-use model with separate towers for residences and offices.