Joint ventures with a developer in Israeli real estate
Joint ventures with a developer in Israeli real estate
Few real estate projects in Israel are carried by a single party from start to finish. Landowners bring plots, developers bring execution, investors bring equity and backing companies bring financial strength that banks require. A joint venture pulls these contributions together, but only if the structure clearly allocates money, control and risk. This guide explains the common partnership models, the guarantees that support them and the points that deserve attention before anyone signs.
Why partner rather than go alone
Bank accompaniment requires equity, guarantees and a credible execution team. A developer with a strong pipeline may lack capital, while an investor with capital may lack the experience to manage planning, contractors and sales. Partnering lets each side contribute what it does best.
For landowners, a partnership can capture more of the development value than a sale, while reducing the exposure that comes with building alone. For investors, it offers access to projects they could not originate themselves.
Common partnership structures
The structure determines who owns what, who decides and how profits and losses flow. Tax and financing considerations often decide between the options, so lawyers and accountants should be involved from the first term sheet.
Joint company – partners hold shares in a project company that owns the rights
Contractual partnership – partners share profit under an agreement without a new entity
Landowner and developer – a combination or profit-sharing deal on the owner's land
Capital partner – an investor funds equity in return for a preferred or shared return
Guarantees and backing companies
Banks and landowners often require guarantees that a developer alone cannot provide. A backing company or a strong partner may provide corporate guarantees, deposit equity or stand behind completion.
Each guarantee carries exposure, so the agreement should state its scope, its duration and what the guarantor receives in return, whether a fee, a profit share or priority in repayment.
Governance, control and exit
Partners need clear rules on budgets, approvals, contractor selection, sales pricing and changes to the plan. Deadlocks are common in long projects, and a well-drafted agreement includes a mechanism for resolving them.
The agreement should also cover what happens if a partner cannot meet a capital call, wants to leave early or breaches its obligations.
Decision matrix – which decisions need unanimous consent
Capital calls – consequences of failing to contribute
Deadlock – mediation, buy-sell or other mechanisms
Exit – transfer rights and first refusal between partners
How Elkayam Group takes part
Elkayam Group works with backing companies, brings partners into development and renewal projects and provides guarantees for clients. The group's experience in combination deals and complex deals helps it design structures that satisfy banks, landowners and investors at the same time.
Discussing a partnership early, before commitments are made to a landowner or bank, usually leads to a more balanced and financeable structure.
Frequently asked questions – developer joint ventures
What does a backing company do in an Israeli project
It adds financial strength, usually through guarantees or equity, so that the project can meet bank and landowner requirements. It is compensated through fees or a share of profits.
Can a private investor join a developer's project
Yes, often as a capital partner. The investor should review the feasibility, the bank terms and the partnership agreement with independent advisers.
How are profits divided in a real estate joint venture
There is no standard division. It depends on each partner's contribution of land, equity, guarantees and work, and is negotiated case by case.
Why Elkayam Group
The group works in development, urban renewal, combination deals and complex deals, cooperates with backing companies, brings partners into projects and provides guarantees for clients. The team works in Hebrew, English and French.
Contact: +972-53-658-4252 · support@kobielkayamrealestateltd.com · Rival St 37, Tel Aviv