Cybersecurity giant Palo Alto Networks (Nasdaq: PANW) is expanding and will occupy half of Alon Tower 1 on Yigal Allon Street in Tel Aviv. The company currently occupies 13 floors in Alon Tower 1, one of two identical towers, and recently leased six more 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 to rent office space, at NIS 100 per square meter per month. The building’s owners, Harel, Migdal and the insurance companies, are considering selling the entire building, whose value is estimated at about 2.5 billion shekels.
“Over the past year, our R&D center in Israel has continued to grow alongside our employees permanently working in offices, so after months of planning we have signed on for additional space in Alon,” Palo Alto Networks said.
Starting from four floors
Palo Alto Networks’ offices in Israel began with four floors in Alon Tower 1, which was leased in 2017 for NIS 7.8 million annually. Over the years, the company expanded the tower, so that with the signing of the latest lease contracts, 19 of the 40 floors will be occupied by offices. The company is expected to pay about 40 million shekels annually to rent about half of the tower, with prices ranging between 108-135 shekels per square meter per month between the different floors, mainly due to the dates of the lease contracts from 2017 until today. The additional rented floors are expected to be occupied in phases. Two of the new floors will be occupied next month and another four during 2025.
The Allon Towers consist of two 42-story office towers, including commercial floors and 2,400 parking spaces. The towers, located on Yigal Allon Street near the Electra Tower, were developed and built by the BSR Group through a purchasing group on the site of a former factory. Members of the purchasing group included the Harel and Migdal insurance companies, which purchased the rights to build the northern tower, “Allon 1.” The southern tower, “Allon 2,” was built by BSR, through a purchasing group of dozens of buyers who purchased 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 trading on the Nasdaq with a market cap of $105.8 billion, after its stock price rose more than 30% in the past year. The company was founded in 2005 in California by Israeli businessman Nir Zuk. In 2012, the company was listed on the Nasdaq stock exchange and employs more than 13,000 people worldwide, including more than 1,000 in Israel.
Overlooking the checkpoint Sitting atop the Alon Tower will allow Zuk a glimpse into Check Point Software (Nasdaq: CHKP), where he began his career before leaving in 1999, after disagreements with founder and CEO Gil Schwed. At one point, when he was still a relatively unknown businessman in Israel, Zuk became famous after Palo Alto placed a billboard next to Tel Aviv’s Ayalon Expressway outside the offices of its main competitor Check Point, boasting that he had surpassed Check Point. A significant amount of water has passed along the Ayalon River, 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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