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While for many companies in the real estate industry this is the most challenging period they have ever experienced, for Mario Zozel and Ami Bar Mashiach, the owners of the public real estate company Almogam, the current crisis is another challenging crisis from the series of crises that have accompanied the real estate industry In the last four decades...
At a time when for many companies in the real estate industry this is the most challenging time they have ever experienced, for Mario Zozel and Ami Bar Mashiach, the owners of the public real estate company Almogim, the crisis The current one is another challenging crisis from the series of crises that have accompanied the real estate industry in the last four decades, “the experience we have gained over the years, together with the difficult crises we have overcome, have helped us arrive prepared for the current crisis with the knowledge that thanks to our responsible conduct we will also get through it”
The current crisis that is hitting the real estate world starting in the middle of 2022, a crisis that includes a steep increase in interest rates as part of the fight against rising inflation, a global economic slowdown, and a war of iron swords, makes its activity very difficult The regulation of the real estate industry. If in normal times there are significant percentages of businesses in the real estate sector that are at financial risk, then today, in light of the economic reality, there is a fear that the current sequence of crises will collapse quite a few of the businesses that do not benefit from financial relief, or those that leveraged themselves significantly and were wrong in their predictions regarding The mood in the real estate market.
In general, it can be said that after a decade and a half of growth, the industry is facing a crisis that has not been seen for many years and for many of the companies, this is the most significant crisis they have encountered. “When you look at the spectrum of real estate companies in Israel, a large part of them are companies with relatively little seniority that have not experienced working in a high interest environment,” says Mario Zozel, co-owner of Almogim, “We have been in the industry since the mid-eighties of the last century and during the years that have passed since then we have come across During times of crisis that included, among other things, a high interest rate environment, high inflation and customers who ‘sit on the fence’ and do not buy apartments. The past experience gained then is what helps us in this period because we have already experienced dramatic and difficult times and learned how to get through them. Experience is what gives us the management tools to deal with the different scenarios of the housing market, and in the absence of this kind of experience, the situation is more complex. In light of all this, we are always preparing for the many expected challenges”.
According to Zozel, even in crises there are opportunities, and so is the current crisis. According to him, knowledge and experience are also required to identify the good opportunities that come to the market so that they can be turned into business opportunities. Because even in the opportunities that come your way, wise conduct is required that will allow you to overcome the crisis, “We are in a time that requires caution. You need to be focused, pay attention to what business moves you choose to make. This is a challenging time, but at the same time, it is a time when market forces mean that entrepreneurs and companies who did not come with preparedness for the event, they will not be able to deal with it in a good way from a business point of view. The period will be characterized by a work environment of professional companies and many players will give way to experienced “real estate professionals” who know how to get through the current period, those who knew how to take advantage of the new opportunities to continue growing after the crisis. The professionals in the market will act patiently and wisely and find the opportunities that will arise. Sometimes it takes a while, but it will come. Companies that purchased land at high prices while the interest rate was zero will be forced to realize assets.”
How do you keep your head above water and face the crises and challenges?
The Almogam company was founded in 1986 by Mario Zozel and his partner Ami Bar Mashiach, who also serves as chairman, both co-owners of the company. The two met as students at the Technion back in 1984 and formed a strong friendship that also led to the establishment of the joint business. The two did not They came from affluent families and gradually built themselves up. They began their journey with construction work that led to the creation of limited personal capital. Winning a tender for a neighborhood rehabilitation project led by the Ministry of Housing and successful execution of the project increased their equity, and then came another tender win in the ‘Mafal Ata’ project to establish 20 villas on lands adjacent to Kibbutz Osha and Kfar Maccabi, in the municipal area of Kiryat Ata. Later, the two performed construction work for large companies, and after the great immigration from the Soviet Union, the two managed to integrate into the construction of mass apartments for the immigrants in the early 1990s, and the rest is history.
The two are today managers of a publicly traded company that has built thousands of apartments in Israel. Starting in 2020, the company uses its extensive experience and knowledge to expand and deepen its activities in the field of urban renewal under the leadership of Mrs. Noi Dotan. In addition, for an entrepreneurial arm company that carries out successful and profitable real estate activities in Croatia and Serbia, “we have always been solid people, many times people from the industry came to us and told us, or rather asked us – while trying to convince us, to leverage ourselves more so that we can move forward quickly. But at times like this I always quoted a friend of my late father, a wise guy of Druze descent who always said, ‘When you go up a step and another step, the chance that you will reach the top is high. But if you go up two steps at a time, the chance that you will fall on the way is high.’ this worldview since the founding of the company,” says Ami Bar Mashiach.
Indeed, this path led the two to turn Almogam in 2010 into a reporting company with access to bond raising and the capital market, and in 2020 the company became a public company traded on the Israel Stock Exchange, “in March 2020, With the beginning of the corona, we made the share issue and it gave us a serious boost. We are a solid public company with skilled personnel, a skilled and experienced management team, a company that is able to do many projects at the same time without jumping over the navel. We did not bring ourselves to a capital to balance sheet ratio of 10% – for the investors, on the other hand we did not waste the potential for future capital growth and remained with 25% of the public’s share of the capital – for the capital holders. We are in the twenty percent capital to balance sheet area. Cautious but daring”.
“Companies should conduct themselves in such a way that the crisis does not put them with their backs against the wall”
When trying to break down in detail how to survive challenging periods of crises, Ami Bar Mashiach and Mario Zozel have some important tips. “You have to be at your best in times like this. This is a time when we are mobilizing the engineering, entrepreneurial and marketing knowledge we have accumulated in the company to move the company forward,” says Bar Mashiach, “We know these downs and we know that after them will come the ups. We have a good foundation in the company and it helps us with the various challenges. For example, throughout the years we made sure to carry out ‘in-house’ sales and not outsource the sales to intermediaries, and in this way we created a lot of internal experience that proves itself in the sales that are carried out despite the difficulties in the current period. As owners, we also have many years of experience and training that gives us added value : I am a civil engineer and this gives me a point of view that knows how to plan construction in the right way, to avoid mistakes and to know how to correct mistakes that have occurred. At the same time, for most of the years I managed marketing and sales. Today we have a deputy general manager who is also responsible for marketing and sales, among other things, but the years I performed in this position help We are very good at carrying out tasks and meeting goals. This is a time when it is necessary to generate creativity in sales since it is impossible to sell at high prices, but also not to lower prices just to meet targets or to roll over and absorb unprofitable projects. You have to be realistic in the goals that the companies set for themselves and come up with wining promotions, such as, for example, a promotion on the interest rates, or other gimmicks that produce real added value for the tenants. At the same time, Mario, for his part, took on the heavy task of execution and all day he ‘pulls out of the drawers’ many decisions that come from experiences and challenges he has already experienced in the last decades, which means that we have an answer and an optimal answer to every problem that arises – a critical matter at a time when many companies every A shekel counts”.
Mario Zozal and Ami Bar Mashiach (Photo: Public Relations)
His words are also joined by Mario Zozel, who claims that this is a period in which great vigilance is required for everything that happens in the market, including everything related to working relationships with suppliers and contractors, “One of the signs of this period and periods that preceded it is that it is enough that a supplier falls, or a contractor collapses, and a domino effect is created that delays the entire chain of action and your ability to work is impaired.”
The two also note the fact that the pressure on the industry creates opportunities as mentioned. RMI is also forced to lower prices since most of the companies do not have money, but the Authority still has to meet certain targets. This causes the Authority to lower land prices while creating opportunities for liquid companies. To this must be added, of course, the entrepreneurs who sell land due to cash flow distress. “It is important for companies to have They have access to money, such as in the case of public companies that can increase liquidity by raising bonds. True, the interest rate is high, but the opportunities that are beginning to arise have a significant chance of becoming extremely profitable,” explains Bar Mashiach.
Looking ahead, the two choose, even after four decades of doing to continue building, while maintaining a practical, cooperative, calculated, responsible and ambitious approach, “There are ups and downs in business and there should always be Connected to the ground while looking at the glass half full. Knowing how to raise your head during the difficult times and when the good moments come, not to forget that there are times of crisis and to prepare yourself for them,” claims Zozel.
Bar Mashiach agrees with his words, “In general, I think there is no difference in the conduct of personal life and professional life. And here comes the matter of the ego, which is a fundamental matter: the ego must not rule us and the understanding that the ego is a barrier that prevents success It is an important insight. You need to know how to accept the other person and avoid friction. For many years, I was involved a lot in the field of freediving at a club in the south. At the entrance to the club there was a huge sign: ‘To everyone who passes through this gate – please leave the ego outside’. In freediving, the ego causes death, And in business, it can bring down the business, and this is exactly what we apply in our partnership, in the past, today, and also in the future. We have other long-standing partnerships, we also have external partnerships that have already ended, and we have always remained in good company with the people we worked with. We know how to do things for the long term”.
An interview with Mario Zozel and Ami Bar Mashiach, the owners of the public real estate company ‘coral’
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