Levinstein Properties: Do Kfar Saba and Be'er Sheva Already Justify the Value Booked for Them?
By year-end 2025 Kfar Saba and Be'er Sheva were already carried at ILS 123.5 million and ILS 160.2 million, while actual 2025 NOI was only ILS 65 thousand and zero. The question is no longer whether construction is complete, but whether lease-up will prove the booked value.
Where the question really sits
The main article argued that 2026 will be decided by one transition: moving from accounting value to actual NOI and cash. The two assets completed at the end of 2025, Levintech in Kfar Saba and Levinstein-Clal Tower in Be'er Sheva, sit at the center of that transition. This follow-up isolates only them: what has already been booked, what is actually signed, and what still has to happen before the year-end value looks convincing without leaning on appraisal language.
The good news is that the company did not carry these assets above cumulative cost. Kfar Saba ended 2025 at fair value of ILS 123.5 million versus cumulative cost of ILS 148.5 million. In Be'er Sheva, the company's share is carried at ILS 160.2 million versus cumulative cost of ILS 170.2 million. The less comfortable part is that this value still is not supported by proven NOI. Kfar Saba generated only ILS 230 thousand of revenue and ILS 65 thousand of NOI in 2025. Be'er Sheva recorded no operating revenue or expense at all in 2025.
| Asset | Fair value at year-end 2025 | Cumulative cost at year-end 2025 | Actual 2025 NOI | Adjusted NOI at year-end 2025 | Adjusted yield | What was signed by year-end 2025 |
|---|---|---|---|---|---|---|
| Kfar Saba | ILS 123.5 million | ILS 148.5 million | ILS 65 thousand | ILS 3.4 million | 2.7% | Retail 100%, offices 14%, total 23% |
| Be'er Sheva, company share | ILS 160.2 million | ILS 170.2 million | 0 | ILS 2.1 million | 1.3% | about 23% of the asset |
That chart defines the right debate. This is not a story of generous marks detached from invested capital. It is a different question: is even a value that remains below cost already justified when actual NOI is still close to zero.
Kfar Saba: retail is in, the offices are not
Kfar Saba is easy to misread if you focus only on completion and reclassification into investment property. At year-end 2025 this was an asset where retail was fully signed, but the offices were still at the very beginning. The company describes roughly 1,000 square meters of retail, six office floors totaling about 8,800 square meters, and two parking basement levels with about 195 parking spaces. By year-end, binding leases covered 100% of retail, 14% of offices, and 23% in total.
That is the core point. The asset crossed the engineering finish line, but not the commercial one. That is why the 2025 operating numbers barely support the booked value: revenue of ILS 230 thousand and NOI of only ILS 65 thousand. If you divide that NOI by the year-end fair value, you get an actual yield of roughly 0.05%. Even after moving to the company's more forgiving framing, adjusted NOI based on year-end occupancy, the asset reaches only ILS 3.4 million and an adjusted yield of 2.7%.
What matters here is that the problem does not look like inflated rent assumptions. On the contrary. Average monthly rent on the leased space stands at about ILS 180 per square meter in retail and about ILS 75 per square meter in offices. The cap rates used by the appraiser, 6.5% to 7.25% on leased space and 7.25% to 7.5% on vacant space, do not look detached either. The yellow flag sits somewhere else: most of the office building is still unsigned, so the value rests less on in-place contracts and more on the assumption that demand will show up on time.
There is also an important nuance that softens the bearish read. Kfar Saba did not receive a free uplift in 2025. The company booked a revaluation loss of about ILS 1 million in 2025 and a loss of about ILS 4.7 million in 2024, mainly because completion cost estimates moved up. In other words, the books have already absorbed some of the pain from construction cost inflation. Even after that adjustment, though, the operating proof is still missing.
That makes 2026 a fairly short year for Kfar Saba. At the end of September 2026, a bank loan of ILS 56 million secured on the asset comes due. It may well be refinanced, and management explicitly says it expects such loans to be renewed. But an asset coming into refinancing with retail fully signed and offices still at 14% needs a much better operating story, quickly.
Be'er Sheva: the anchor lease matters, but it still is not NOI
Be'er Sheva is different, but not more comfortable. Here there is a clearer anchor lease, but even less operating proof. On a 100% basis, the project includes about 31,200 square meters of offices, about 550 square meters of retail, and a parking structure of about 21,000 square meters with 623 parking spaces. The company's share is 50%, which is why the carrying value stands at ILS 160.2 million against cumulative cost of ILS 170.2 million.
What lifted the story in 2025 was the win with the Government Housing Administration. The company and its partner received the tender award in May 2025, and by September 2025 the lease was signed. The leased area totals 7,100 square meters plus storage and parking, for a 10-year term with five one-year options. Expected annual rent and management income stands at about ILS 9.3 million, of which the company's share is about ILS 4.6 million.
That explains why the asset recorded a revaluation gain of about ILS 3.6 million in 2025. The company states explicitly that the gain came mainly from the higher as-complete value following the lease-up to a material tenant and the update to completion costs. So there is now a real event that reduces uncertainty. But it does not erase the operating gap. The company and its partner still need to carry out the fit-out works, and as of the report date the tenant had not yet occupied the building. That is why no revenue or operating expense was recorded in 2025.
The company tries to bridge that gap with adjusted NOI of ILS 2.1 million and an adjusted yield of 1.3%, based on the Government Housing Administration lease that had still not been occupied at the report date. That phrasing matters most. Even after giving full credit to the signed lease, the adjusted yield remains very low relative to the booked value. That makes Be'er Sheva look less like a proven income asset and more like a good first contract that still has to become a functioning building.
Here too, rent does not look like the central issue. Average monthly office rent on the leased space is ILS 75 per square meter, similar to Kfar Saba. The risk sits elsewhere: execution. At year-end 2025, the disclosed signed occupancy of roughly 23% was anchored by the Government Housing Administration lease, which still had not turned into physical occupancy. If the move-in happens and the building starts operating, the value will look much more reasonable. If fit-out, handover, or broader leasing are delayed, even a government-backed lease leaves the asset far from full operating justification.
There is also a financing nuance versus Kfar Saba. The company says Be'er Sheva was not financed under a closed construction facility. It was funded from company sources and solo-level credit. That means the timing of NOI is not only a property-level valuation question. It also feeds directly into group-level capital allocation.
What is already supported, and what remains open
Put the two assets together and the conclusion becomes fairly sharp. At year-end 2025, the booked value does not look absurd relative to cost, but it is still not supported by in-place NOI. Kfar Saba is mainly a story of office absorption that has not happened yet. Be'er Sheva is mainly a story of an anchor lease that has been signed, but has not yet turned into operations.
| Asset | What supports the value | What remains open |
|---|---|---|
| Kfar Saba | Fully signed retail, rent assumptions that do not look aggressive, carrying value below cumulative cost | Office leasing still only 14%, actual NOI is almost zero, loan maturity in September 2026 |
| Be'er Sheva | Government lease for 7,100 square meters, revaluation gain clearly tied to a material tenant signing, carrying value below cumulative cost | Zero 2025 operating income, fit-out still ahead, and signed occupancy still rests on an anchor lease that has not yet been occupied |
The last chart captures the right gap. Even after the company's own adjustments, these assets still do not look like properties whose value is already supported by recurring income. For now, the booked value is still mainly a judgment on future lease-up speed.
Bottom line
Do Kfar Saba and Be'er Sheva already justify the value booked for them? Not yet in full. But this is not a case of value floating above reality either. Both assets are carried below cumulative cost, the disclosed rent assumptions do not look stretched, and Be'er Sheva already has a real anchor lease. So the debate is not whether engineering and planning value has been created. It has. The debate is how quickly that value becomes NOI.
In Kfar Saba, the test is office absorption depth. In Be'er Sheva, the test is converting a signed government lease into a live operating building, and then widening the tenant base. Until that happens, the books are telling a more advanced story than the operating statement. If 2026 delivers a real NOI step-up from both assets, the year-end 2025 values will look reasonable in hindsight. If not, this question will come straight back to the table.
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