10 Bryant: When the Repositioning Starts Showing Up in NOI and Cash
10 Bryant ended 2025 with 81% occupancy, an Amazon anchor lease, and a USD 728 million fair value, but the monetization path is still back-ended. Amazon's 16-month free-rent period, USD 53.8 million of TI on the leased area, additional upgrade work, and a possible sale payment to Amazon mean the repositioning shows up in value first and only later in NOI and cash.
Why 10 Bryant merits a standalone continuation
The main article argued that most of the group's value still rests on Gav-Yam, while the real funding test remains at the parent. 10 Bryant can improve that picture, but not through the straight line the Amazon headline may suggest. The issue worth isolating here is timing. The tower ended 2025 with an anchor tenant, a retail lease that strengthens the repositioning story, 81% occupancy, and a USD 728 million fair value. Yet 2025 NOI still fell to USD 25 million, and the presentation says NOI excluding IFRS adjustments, mainly straight-line rent effects, was only USD 9 million.
That is the core point. The repositioning is already showing up in valuation well before it shows up in cash. Amazon signed in April 2025 for 330 thousand square feet over 15 years, with an option for another 145 thousand square feet in 1W39. Life Time signed in June 2025 for 52 thousand square feet of retail. But those leases arrive with an expensive bridge period: 16 months of free rent for Amazon, USD 53.8 million of TI on the leased area, another USD 17.4 million of TI if the option area is exercised, and about USD 20 million of additional renovation and upgrade work. Even at Life Time, the operating contribution is delayed because the club is expected to open only in the fourth quarter of 2026.
Three non-obvious findings stand out. First: the move in fair value from USD 700 million in June to USD 728 million in December came mainly from capital already invested and from the shortening of free-rent and vacancy periods, not from a change in the core valuation assumptions. Second: the valuation assumes terminal-year NOI of USD 69.6 million, nearly 3 times the 2025 headline NOI and almost 8 times the NOI the presentation shows excluding IFRS adjustments. Third: even a monetization event does not mean all of the value turns into clean sale proceeds. The Amazon lease includes a payment to Amazon if the tower is sold, and the company itself gives an example of USD 7.8 million for the leased area plus USD 3.3 million for the option area if exercised.
What has been leased, and what still has not turned into NOI
At the leasing level, 2025 was actually a breakout year. The company delivered the leased area to Amazon on June 1, 2025, and the presentation says the option area in 1W39 represents about 17% of the tower's leasable area. As of December 31, 2025, occupancy stood at 81%, representing 85% of forecast rent, and if the option area is leased to Amazon or another party occupancy should reach 97%. In other words, by year-end 2025 the problem at 10 Bryant was no longer a lack of basic leasing demand. It was the distance between signed leases and NOI and cash that have actually matured.
That friction sits inside the lease terms themselves. The Amazon contract brings about USD 29.5 million of annual rent on the signed area, and another USD 8.4 million if the option is exercised. Life Time adds a retail lease at an average starting rent of about USD 62 per square foot plus revenue participation. But neither move was designed to produce an immediate cash surge in 2025. They were designed first to stabilize the asset, shorten the bridge period, and support value and a future monetization path.
| Layer | What has already been achieved | What still stands between that and cash |
|---|---|---|
| Amazon, signed area | 330 thousand square feet for 15 years, about USD 29.5 million of annual rent | 16 months of free rent, USD 53.8 million of TI, and about USD 20 million of additional upgrade work |
| Option area in 1W39 | Option for another 145 thousand square feet, about USD 8.4 million of annual rent if exercised | Another USD 17.4 million of TI if exercised, and uncertainty over whether the area will go to Amazon, another tenant, or a separate monetization route |
| Life Time | 52 thousand square feet of retail, with revenue participation, as part of the tower's repositioning | Opening is pushed into the fourth quarter of 2026, and the company is funding part of the refurbishment work |
| Sale of the tower | Fair value rose to USD 728 million by year-end 2025 | A sale can trigger a payment to Amazon, and the company's example shows USD 7.8 million for the signed area plus USD 3.3 million for the option area if exercised |
What matters is that the tower already looks much better in leasing than it does in NOI. That explains why 10 Bryant is easier to read today as an asset in stabilization than as a stabilized operating property. It also explains why the 2025 NOI figure, and especially the USD 9 million NOI excluding IFRS adjustments, still does not tell the story that the new leases are supposed to create in later periods.
Why fair value is moving ahead of NOI
The company updated the fair value of the tower to USD 700 million as of June 30, 2025, using a discounted cash-flow model with a 7.0% discount rate, a 5.5% terminal cap rate, and terminal-year NOI of USD 69.6 million. By the end of September, fair value had risen to USD 718 million. According to the note, that increase came mainly from USD 4 million of investments made during the third quarter and from USD 14 million of shortening in the free-rent period and the vacancy period between tenants. Beyond that, the assumptions did not change.
By the end of December, fair value rose again, to USD 728 million. Here too, the explanation matters more than the headline. The increase came mainly from USD 18 million of investments made during the fourth quarter and from further shortening of the free-rent and vacancy period, though part of the effect was offset by an updated investment budget and higher operating expenses. This is not a jump built on a tower that is already producing stabilized NOI. It is a jump built on capital going into the property, time passing, and the path to stabilization getting shorter.
That is also why the valuation layer is not as clean as it first looks. The note says the company recorded a total 2025 fair-value decline of NIS 26 million on investment property, net of straight-line rent effects and a provision for expected sale costs, mainly the payment to Amazon in a sale scenario. In other words, even before any actual disposal event, part of the exit friction is already weighing on the accounting line.
The monetization path still runs through two filters: completion and exit
For 10 Bryant to move from a repositioning story to a monetization story, two things still have to happen. The first is operating completion. The option area in 1W39 still has to be leased, the public areas and lobby are expected to be completed by the end of 2026, and Life Time is expected to open in the fourth quarter of 2026. Until that happens, part of the improvement remains at the level of design, positioning, and value, rather than current NOI.
The second filter is the exit route itself. The company says it is also examining the possibility of selling its rights in 1W39 separately, because that building can be physically separated from the rest of the tower. That matters because 1W39 is both Amazon's option area and a possible alternative monetization route. In addition, the Amazon agreement says that if the company wants to lease the additional area to a third party, the option period ends earlier and Amazon retains a 30-day exercise right. So 1W39 is not simple upside. It is a decision point that will affect occupancy, the pace of NOI conversion, and the shape of any monetization path.
The funding bridge is not trivial either. The note explicitly states that the company intends to finance the costs related to the lease agreements, among other things, from its own sources and through a bond expansion or other financing sources. Put differently, 10 Bryant is still consuming capital. In 2025 it is still absorbing investment in order to reach the stabilization point at which it can be judged through NOI and cash, not only through valuation.
Conclusion
10 Bryant has already passed the first demand test. The Amazon lease, the Life Time agreement, 81% occupancy, and the ability to reach 97% if the option area is leased all point to real operating progress. But this is still not the monetization point. In 2025 the tower produced only USD 25 million of NOI, and only USD 9 million excluding IFRS adjustments, while the valuation already rests on USD 69.6 million of terminal-year NOI.
The strongest counter-thesis is that this is simply a bridge year, and that once Amazon's free-rent period runs off, 1W39 is leased, and Life Time opens, NOI should catch up with the repositioning story fairly quickly. That is a serious argument. But as of the end of 2025 it is still a forward assumption, not an achieved result. The central yellow flag is that the new leases improve valuation and the stabilization picture first, while cash comes later and the exit itself may still carry a payment to Amazon and further financing needs for TI and upgrade work.
So this is the next real test for 10 Bryant: not whether the tower looks better, but when the repositioning actually starts moving from appraised value into NOI and cash, and how much of that value remains after completion costs and exit friction.
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