The “Economic Appraisals and Zero Reports” Department deals with two main types of reports:

The first is an initial report which examines the economic feasibility of the project and upon which the decision whether or not to implement the project is predicated (Go/No-Go report).

The second report is a full zero report that includes, inter alia, an analysis of the construction rights in the project and an estimate of its construction costs and anticipated revenues.

In addition, the Department prepares opinions pursuant to Standard 21 regarding an economic appraisal examination for vacate and build schemes. 


The “vacate-and-build” scheme is one of the most important in the process of urban renewal, and entails demolishing an entire complex of buildings that do not meet the earthquake standard and the construction in its place of a new and modern complex with supporting infrastructures.

Many people mistakenly think that the NOP 38/2 track (demolition and build) is in fact a “vacate-and-build” project. It is important to recognize that beyond the imagination of the untrained eye, there is a fundamental difference between the two tracks.

The most significant difference is the size. The “vacate-and-build” scheme relates to a large and complete complex and sometimes to an entire neighborhood, and to a minimum of 24 units, whereas NOP 38/2 usually relates to a single building.

The feasibility of a “vacate-and-build” scheme is examined in a similar way to a zero report, and usually within the framework of the UBP approval procedure. The purpose of the report is to examine economic viability, thus preventing the collapse of the developers and risk to the financing entity

Our firm prepares economic reports for “vacate-and-build” schemes for developers and Planning Committees, as well as opinions for residents relating either to the consideration they are being paid or “refusing residents”. The firm also provides guidance with respect to legal proceedings.

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NOP 38

What is NOP 38?

A national outline plan to strengthen buildings against earthquakes. It is estimated that most of the buildings built in Israel prior to 1980 do not meet the requirements of the Israeli Standard for Earthquake Resistant Construction. In light of this, there is concern that if a strong earthquake was to occur in Israel, many structures shall not withstand the strain and collapse, exacting a heavy toll in terms of life and limb.

The purpose of the Plan is to provide an economic incentive to strengthen the buildings by granting increased construction rights, and shortening the bureaucratic procedures involved in obtaining a construction permit. This is in order to encourage homeowners to strengthen the buildings they own.

Over the years, the Plan has undergone a number of amendments, including in the area of taxation.

NOP 38 offers 2 main tracks:

The Condensation and Reinforcement track – within the framework of which additional floors are built on top of the existing building while strengthening the structure.

Demolition and Construction – within the framework of which the building is completely demolished and a completely new structure is built.

A feasibility report for an NOP 38 project is undertaken in a similar way to a zero report and before the financing is received, in order to check its economic viability and thus prevent the collapse of the developers and risk for the financing entity.

Our firm provides economic reports for NOP 38 projects for developers, opinions for residents regarding consideration or “refusing residents”, and also guidance in legal proceedings.

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Economic Feasibility Examinations

What is an economic feasibility examination?
The purpose of the examination is to make an estimate of the projected business results in relation to a planned project. An economic feasibility study provides a measured and accurate indication and understanding of the anticipated profits and expenses planned in the various stages throughout the desired project. The examinations are primarily used by developers and private landowners, who are in the process of taking decisions regarding the entering into of a transaction. The examinations are undertaken for all types of real estate and in particular for urban renewal projects: NOP 38 and vacate and build.
An economic feasibility examination is prepared in a similar format to a zero report.
There are 2 main objectives in undertaking an economic feasibility examination:
The first – To determine whether the project is economically justified and viable, while understanding whether the projected profits exceed the planned costs.
The second – To try improve the results of the project in accordance with the conclusions drawn from the various stages of the examination.

Our firm offers real estate advice and guidance and undertakes economic feasibility examinations for various types of assets which exist in the market, and in particular in the areas of urban renewal.

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Combination transactions

What is a combination transaction?

A combination transaction is an exchange transaction in which a landowner enters into a collaboration agreement with a contractor or developer in order to get the most out of the property.

The landowner “brings” the land to the transaction, the contractor or developer “brings” the construction services to the transaction, and they divide the profits according to the percentages which were agreed in advance.

Determining the combination rate is a very complex matter. The person responsible for determining the value is a real estate appraiser who performs two essential examinations:

An economic examination – An in-depth and comprehensive assessment of the economic advisability and feasibility of the transaction having regard to all its elements: construction costs, expected income, taxation, duration of the construction, uncertainty, etc.

An examination of comparable transactions – An examination of the combination rates in similar real estate transactions, which were closed near the date of the economic examination and in close geographical proximity to the property.

Our firm offers the advice and guidance of a real estate appraiser in combination transactions of all types and complexities, from the stage of the contract between the parties to the stage of implementing the transaction.

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