Almogim plugs holes from the real estate crisis; sells apartments at a loss to Magurit
The slowdown in sales and rising construction costs are pressuring residential developers. Almogim has sold 54 units in its Rehovot project to the Magurit REIT fund, expecting a loss of 6–7 million shekels.
The slowdown in sales and the rise in construction and financing costs are creating significant difficulties for residential real estate companies. As financial gaps widen, housing rental REIT funds are stepping in to fill them. This trend is clearly reflected in the recent deal between the developer Almogim and the REIT fund Magurit.
Almogim, which began marketing a 311-unit project in Rehovot in 2023, had managed to sell only 124 units (40% of the project) until recently, with only 22 sold since the start of the year. To align construction progress with sluggish sales, the company entered into an agreement to sell 54 units to Magurit. Almogim estimates that the deal will result in a loss of 6 to 7 million shekels in its annual financial statements. The project is expected to be completed in 2028.
For context, 2023 saw 41 units sold, while 2024 and 2025 saw 29 and 32 units sold, respectively. Magurit will purchase the 54 units (a mix of 3-5 room apartments) for 117 million shekels. The average price of 2.2 million shekels per apartment is consistent with this year's sales but lower than the 2.4 million and 2.5 million shekels seen in 2025 and 2024, partly due to a bulk discount.
The increase in construction costs—from an estimated 647 million shekels in 2023 to 688 million shekels by the end of June—has reduced the project's expected gross profit from 13% to 10%. Beyond the Rehovot project, Almogim has three other projects totaling 364 units nearing completion by next year, with sales rates ranging from 41% to 76%.
Buyer incentives also highlight the period's challenges. In the first half of 2026, 70% of Almogim's transactions included "contractor loans," with the company paying 7.4 million shekels in interest to banks, which reduced revenue by 2.3 million shekels (compared to 26% and 4.2 million shekels in 2025).
Financial results reflect these pressures. While Almogim's first-half revenue jumped 49% to 232 million shekels, rising execution costs eroded gross profit to 30 million shekels. Furthermore, financing expenses more than doubled to 32 million shekels, turning a 4.2 million shekel profit into a 13 million shekel loss.
Similar deals are becoming common. Last year, Magurit helped Mivne Real Estate boost sales in the "HaSolelim" project in Tel Aviv by purchasing 47 of 360 units for 191 million shekels. Likewise, in May, the REIT fund Rent It purchased 52 units from Aura in a Hadera project, where only 357 of 435 units had been sold by the end of February.
