Cybersecurity giant Palo Alto Networks (Nasdaq: PANW) is expanding and will occupy half of the Alon 1 tower on Tel Aviv’s Yigal Alon Street. The company currently occupies 13 floors in the Alon 1 tower, one of a pair of identical towers, and recently leased another six floors and is now in talks to lease the entire tower.
If the talks come to fruition, Palo Alto Networks will pay NIS 80 million per year for leasing the office space, at a price of NIS 100 per square meter per month. The owners of the building, the Harel and Migdal and insurance companies, are considering selling the entire building, which is worth an estimated NIS 2.5 billion.
Palo Alto Networks said, “Over the past year, our R&D center in Israel has continued to grow along with our employees working permanently in the offices, and so after months of planning we have signed for addition space in Alon.”
Beginning with four floors
Palo Alto Networks’ offices in Israel began with four floors in the Alon 1 tower, leased in 2017 for NIS 7.8 million annually. Over the years the company expanded in the tower, so that with the latest lease contracts signed, it will occupy 19 floors out of the 40 office floors. The company is expected to pay about NIS 40 million a year to lease about half of the tower, with a range in prices from NIS 108-135 per square meter per month between different floors, mainly due to the dates of lease contracts from 2017 until today. Occupancy of the additional leased floors is expected in stages. Two of the new floors will be occupied next month and four more during 2025.
Alon Towers comprises two 42-floor office towers including commercial floors and 2,400 parking spaces. The towers, on Yigal Alon Street near Electra Tower, were developed and built by BSR Group through a purchasing group on the site of a former factory. Among the members of the purchasing group were insurance companies Harel and Migdal, who purchased the rights to build the northern tower “Alon 1”. The south tower “Alon 2” was built by BSR, through a purchasing group of dozens of buyers who bought the offices for their own use or for rent.
Palo Alto Networks is a cybersecurity company, whose products include cloud-based systems. The company is traded on Nasdaq with a market cap of $105.8 billion, after its share price rose over 30% in the past year. The company was founded in 2005 in California by Israeli entrepreneur Nir Zuk. In 2012, the company was listed on Nasdaq and employs over 13,000 people worldwide, of which more than 1,000 are in Israel.
Looking down on Check Point Sitting at the top of Alon Tower will allow Zuk to look down Check Point Software (Nasdaq: CHKP), where he began his professional career before leaving in 1999, following disagreements with founder and CEO Gil Shwed. At one time, when he was still a relatively unknown entrepreneur in Israel, Zuk became famous after Palo Alto put up a billboard beside the Ayalon Highway in Tel Aviv outside the offices of its major rival Check Point, boasting that it had surpassed Check Point. A lot of water has passed along the Ayalon, and Check Point (market cap $17.7 billion) is trading at a fraction of Palo Alto.
Published by Globes, Israel business news – en.globes.co.il – on June 26, 2024.
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