The credit rating company Fitch announced this week the downgrading of Israel's credit rating from A+ to A with a negative outlook, meaning that the company estimates that there is a high probability of another downgrade in the near future.

The main reasons for the decision are:

The continuation of the war and the assessment that the war is not expected to end soon and will slide into 2025.

The geopolitical risks and the resulting physical consequences.

The expected budget deficit and the worsening of Israel's debt-to-GDP ratio

Like a person with a fever, cough and muscle pains who goes to the doctor and the doctor tells him you are sick, the reports of the rating companies Moody's, S&P, Pitch do not carry a line but only confirm what is happening, a kind of third grade certificate in school. And like the girl who knows her school situation, the downgrade has already been priced in the market and everyone, including the investors, knew the situation even before the report. In any case, Israel trades at a rating level that is much lower than the actual rating. The only thing that is really surprising is the negative future forecast.

Regarding the real estate sector, the real challenge is the continuation of the quest to solve the manpower problem in the industry and if we dive for a moment into commercial real estate, someone once said that the problem is Nasdaq, not Rafah. There are very few countries in the world where you can invest in innovation in startups and also make a profit Mehan and Israel is one of them, but the decline in the value of high-tech stocks since November 2021 directly and dramatically affects commercial real estate.

In conclusion, Israel is required for future strategic thinking and the decision makers must take all the necessary steps to show the world that we are determined to return to fiscal discipline that will cool down the inflationary environment and curb the increase in interest rates.

Commercial real estate in Israel

A subsidiary of Israel-Canada (T.R.) Ltd. won a tender for the purchase of lease rights in a plot of land with an area of approximately 4.5 dunams in Sde Dov, Tel Aviv, designated for trade and employment, in exchange for approximately NIS 127 million.

Commercial real estate overseas

Silverstein Properties Limited entered into a binding memorandum of understanding for cooperation in the construction of a casino complex, a hotel and residences on land it owns in Manhattan, through a joint corporation that will purchase the property from the company as part of the transaction, for 422.5 million US dollars.

Real estate in the headlines

The new home of the Ministry of Justice: rents 3,000 square meters in the Australia-Israel building in the US (Nadlan Center)

Can rent exemptions save downtown San Francisco? (Themarker)

The hybrid office is gaining momentum (Nadlan center)

Real estate experts around the world: "Data centers are the most attractive asset class for investment in the US these days (Nadlan center)."