Discount Investments: how much of 10 Bryant's value is actually left after Amazon, capex, and sale frictions
A $728 million headline on 10 Bryant looks, at first glance, like a large option for DIC. In practice, much of the friction already sits inside the appraisal, and what remains for shareholders is far smaller after the asset debt, liabilities, and the holding-company ownership chain.
What This Follow-up Is Isolating
The main article already argued that at DIC the real question is not only whether value exists, but whether that value can actually move up through the layers and reach common shareholders. This continuation isolates only 10 Bryant and asks a narrower question: when the tower is presented at a $728 million fair value, how much of that can really be read as value that is still left, and where exactly can a reader either ignore the friction or count it twice.
That matters because 10 Bryant invites two opposite mistakes. The first is to look at Amazon, Life Time and the higher year-end value and assume the tower is already close to clean cash. The second is to take the $728 million, subtract tenant improvements, free rent and Amazon's sale-related payment again, and thereby double count costs that are already reflected in the appraisal. The right reading has two steps: first understand what the fair value already assumes and absorbs, and only then translate it through the debt, liabilities and ownership structure.
The $728 Million Is Not Gross, but It Is Not Net Either
As of June 30, 2025, the tower was valued at $700 million under a DCF model with a 7.0% discount rate, a 5.5% reversionary rate, a 12-year theoretical realization period, 97% representative occupancy, and a $172 million investment budget for tenant changes, repositioning and brokerage. That is the first point where the read has to become more precise: the appraisal is not a number "before" the upgrade path. It is a number that already assumes a long and expensive path of lease-up and repositioning.
By the end of September 2025, the value was updated to $718 million. The company gave a very direct explanation: $4 million of investments that had already been made, plus $14 million from the shortening of free-rent periods and vacancy between tenants. By the end of December 2025, the value was updated again to $728 million, mainly because of another $18 million of investments made in the fourth quarter and the continued shortening of free-rent and vacancy periods, partly offset by an updated investment budget and operating-expense budget.
The analytical implication is simple. Part of the second-half uplift did not come from the tower suddenly becoming a mature cash asset. It came because money had already been spent and because time had already burned off part of the concessions embedded in the leases. That matters because the year-end headline already contains part of the economic cost of those deals.
| Layer | What the filing says explicitly | How it should be read |
|---|---|---|
| June 2025 investment budget | $172 million for tenant changes, repositioning and brokerage | This is not value on top of the appraisal. It is one of the assumptions inside it |
| Free-rent and vacancy periods | Shortening those periods helped move the valuation from $700 million to $718 million and then supported the December update again | Part of the friction has already rolled through the model with time |
| Expected sale costs | The 2025 fair-value decrease was recorded net of provisions for expected tower sale costs, mainly the payment to Amazon in a sale scenario | Part of the sale friction is already reflected in the valuation layer, so subtracting it again can overstate the haircut |
| Debt and liabilities | ILS 1.315 billion of bonds and another ILS 183 million of payables and other liabilities | These do not sit inside the property fair value itself. This is where the real reduction on the way to shareholders begins |
That is why the right question is not "how much should be subtracted from the $728 million", but "what is already embedded in the $728 million, and what still sits outside it". Without that distinction, it is very easy either to overstate the value or to penalize it twice.
Amazon Improved The Tower, but It Did Not Yet Create Mature Cash
The Amazon lease is real commercial progress. Amazon leased about 330 thousand square feet, or about 31 thousand square meters, for 15 years. Annual rent on the leased space is about $29.5 million, stepping up to $32.2 million after five years and $34.8 million after ten years. Amazon also received an option on roughly 145 thousand additional square feet in the 1W39 building, with annual rent of about $8.4 million if exercised.
But the improvement came with a heavy layer of concessions and spending. Properties & Building committed to $53.8 million of tenant improvements on the leased area, another $17.4 million on the additional area if the option is exercised, and about $20 million of further renovation and upgrade work. Amazon also received 16 months of free rent. Even a sale carries contractual friction: in the company's own example, if the tower were sold at the December 2025 fair value plus the required leasehold investments, the payment to Amazon would be about $7.8 million on the leased area and another $3.3 million on the option area if exercised.
Life Time helps the repositioning story, but it is not immediate cash either. The tenant leased about 52 thousand square feet of retail space at starting annual rent of roughly $62 per square foot plus revenue participation, and the company says the club is intended to begin operating only in the fourth quarter of 2026. So this layer also belongs more to the 2026 and 2027 stabilization story than to readily available 2025 cash.
This chart matters more than any single lease headline. By the end of 2025, average occupancy was 81%, leased area in place was 65 thousand square meters, NOI was only $25 million, and the actual yield was 3.4%. Against that, the company presents a representative NOI layer of $70 million and a representative yield of 7.5%. In other words, the tower is still far away from the stabilized economics that the fair value is trying to capture.
That is exactly why Amazon has to be read carefully. The lease improved asset quality and tenant mix, but it did not remove the transition period. Signed rent is not the same thing as current cash because there is still free rent, capex, brokerage and completion work sitting between the lease and the cash layer.
How Much Is Actually Left At The Asset Layer, And How Much Of That Even Belongs To DIC
To answer the title question, the read has to move from property value to balance-sheet value. At December 31, 2025, the tower's disposal group is presented with ILS 2.418 billion of held-for-sale assets, including ILS 2.323 billion of investment property and another ILS 95 million of deposits, derivatives and receivables. Against that sit ILS 1.498 billion of liabilities, including ILS 1.315 billion of bonds and ILS 183 million of payables and other balances.
This chart sharpens the central point. Even without subtracting every Amazon item again, and even before adding new assumptions about taxes or about the eventual sale price, the net balance-sheet value of the disposal group at year-end 2025 is ILS 920 million. That is simply the difference between ILS 2.418 billion of assets and ILS 1.498 billion of liabilities. On a look-through basis to DIC, which the presentation shows as holding about 70.48% of Properties & Building, the economic share of that layer is roughly ILS 648 million.
It is important to say exactly what that number does and does not mean. It is not a sale-price forecast, and it is not a promise that all of that amount will become free cash. But it does say something more basic: the $728 million headline is not the layer of value waiting for DIC shareholders. On the way down sit asset debt, other liabilities, and only then the ownership chain through Properties & Building.
That is also why the practical reading changes. If the reader wants to know "how much value is left", the more relevant number is not the property headline alone, but the net layer after liabilities. Otherwise the read stays stuck on a gross asset number inside a holding structure, rather than on the economic layer that can eventually matter to equity holders.
2025 Still Looks Like A Bridge Year, Not A Monetization Year
The discontinued-operations income statement says the same thing. In 2025 the tower recorded total income of ILS 296 million against total expenses of ILS 453 million, producing a pre-tax loss of ILS 157 million. After tax, the loss was ILS 121 million.
The most important figure here is not only the loss itself, but its composition. Finance expense alone was ILS 301 million, and the company explains that ILS 143 million of that came from foreign-exchange differences on loans extended by Properties & Building to the subsidiary holding the tower, mainly in connection with bond series 11. So even after the leasing progress, the economics of 10 Bryant are still being shaped not only by leasing and occupancy, but also by financing structure and currency.
That is exactly where the line runs between an upgraded asset and an asset that is ready for monetization. An upgraded asset can look better in the appraisal layer, can sign better tenants, and can improve the commercial narrative. An asset that is ready for monetization also has to show that the frictions on the way have become manageable: capex, free-rent periods, asset-level debt, and financing cost. In 2025, 10 Bryant is still not there.
That is why the answer to the title is two-layered. On one hand, a meaningful part of Amazon's economics, of the transition period and of the sale friction is already embedded in the appraisal, so a model that subtracts all of it again from the $728 million will be too harsh and may double count. On the other hand, even after respecting that point, the value that is actually left at year-end 2025 is much smaller than the asset headline: ILS 920 million at the disposal-group layer, and only about ILS 648 million on a look-through basis to DIC.
That is the core of the story. 10 Bryant is not simply an asset whose value is waiting to be sold. It is an asset that has already made real commercial progress, but the road between its fair value and accessible value for shareholders still runs through investments, financing, liabilities and monetization timing that have not yet fully resolved.
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