A Mayfield Heights office complex that Israeli investors paid $17 million to acquire in 2021 has just sold for $2 million, with the lending bank taking control after no other buyer stepped forward. The Eastpoint complex — two three-story office buildings totaling roughly 170,700 square feet at 6085 and 6095 Parkland Blvd. in the Landerhaven Corporate Park — is the latest asset to sour for Realco Investments, an Israeli real estate syndicator now facing scrutiny over losses across its U.S. holdings.
According to CTech, the sale closed with the lending bank and Realco as the only participants, and Tomer Hay, Realco's CEO and controlling shareholder, wrote that there were no other bids despite marketing efforts the bank said reached roughly 25,000 recipients. Realco structures its deals through investment partnerships, pooling capital from investors to buy U.S. properties like Eastpoint with the help of bank financing.
No Bids, No Buyers as the Bank Steps In
Records tied to the deal show the lending bank had financed approximately $10 million of the original Eastpoint purchase, while 42 investors contributed nearly $7 million in equity, per the investment agreement. A senior executive told the outlet that loans originally taken out at around 3.5% interest now require refinancing at around 7%, a jump that has squeezed cash flow across Realco's leveraged holdings.
Realco was founded in 2016 by Guy Raguan and Tomer Hay, and it grew rapidly between 2021 and 2023, attracting roughly 1,000 investors and accumulating approximately NIS 3 billion in assets across more than 25 investments. The firm was among Israel's most prominent marketers of U.S. income-producing real estate until 2022, when its momentum ran into a regulatory wall.
A 2022 Sanction Slowed a Fast-Growing Firm
The Israel Securities Authority sanctioned Realco in 2022 after finding the company had offered investments to more non-qualified investors than Israeli securities law permits. Under Israel's Securities Law of 1968, private offerings can skip public prospectus requirements only when marketed exclusively to "qualified investors" holding liquid assets above NIS 8 million, or about $2.2 million, according to Herzog Fox & Neeman — investors who also lack the protections afforded to retail buyers under Israeli law. Despite the sanction, Realco's official companies registrar listing shows the firm as non-compliant and restricted, though the company kept actively marketing new investments through 2024.
At least three additional Realco properties are facing financial difficulties, representing roughly $10 million in investments, and industry estimates put the value of Realco assets with confirmed losses at approximately $30 million. Investors in several Realco projects have reportedly recovered only 20% to 30% of their invested capital, and organized investor groups now represent assets worth roughly $150 million.
An Investor Attorney Alleges Mismanagement
Attorney Ido Kosover, who represents some of the affected investor groups, alleges management irregularities and excessive fees have harmed investors' interests. Kosover previously represented investors in the collapse of Neto Finance, an agency that managed approximately NIS 30 billion before failing under debts exceeding NIS 100 million. Realco investors have also commissioned an independent review from Alefy, a firm that specializes in U.S. real estate analysis, and Realco's own website has since gone inactive.
Realco has said each investment project operates independently, with its own financing, investors, and financial performance, and maintains that it keeps direct and transparent communication with investors. The company has recommended that investors avoid legal proceedings that would increase costs, arguing that its investment partnerships remain securities offerings regulated by the Israel Securities Authority. Under the partnership agreements, investors hold no management rights but are meant to benefit from future appreciation and cash flow — though rental income intended to cover financing costs has come under pressure as U.S. interest rates climbed.
A TV Pitchman, a Soccer Deal, and Wider Headwinds
Television personality Gadi Sukenik had no management role at Realco but served as a presenter for the company through an advertising agency, and has said part of his compensation was invested in Realco properties before he ended the commercial relationship years earlier. The arrangement was one way Realco built investor trust during its growth years, alongside a two-year sponsorship deal the company signed with Maccabi Tel Aviv's football club in 2024.
Realco's troubles echo the collapse of Vision & Beyond, a Herzliya-based investment firm that raised between $50 million and $100 million from Israeli investors before losing control of its Midwestern U.S. real estate portfolio to foreclosing lenders in late 2024, as CTech previously reported. U.S. office occupancy nationally remains below pre-pandemic levels, and the report notes that growing artificial intelligence adoption is expected to further reduce long-term demand for office space — pressures that have left leveraged syndicates like Realco's without enough rental income to keep pace with sharply higher financing costs.
Cleveland's Office Market Adds to the Squeeze
The sale also reflects broader weakness in Cleveland's suburban office market. Metro-wide vacancy reached 13.7% in mid-2026, with year-to-date net absorption falling to negative 1.85 million square feet as tenants gave back more space than they leased, according to Cushman & Wakefield. Asking rents in eastern suburban submarkets like Mayfield Heights averaged $19.52 to $19.95 per square foot in 2026, with landlords leaning on tenant-improvement concessions just to hold those headline rates.
Eastpoint itself sits in Landerhaven Corporate Park, an established suburban office center along the Interstate 271 corridor offering underground garage parking and 24-hour key-card access, according to LoopNet. The complex was built in 2000 as a Class A/B office property, the kind of asset that once drew steady suburban tenant demand before the pandemic reshaped office use nationwide.
A National Reckoning for Office Real Estate
The Eastpoint deal fits a national pattern of steep office markdowns. Nearly half of all U.S. office property sales with comparable historical pricing data have traded at a discount since 2024, a trend that has driven 11.8 million square feet of office-to-housing conversions either completed or underway in 2025 alone, per CommercialCafe.
Whether Kosover's investor groups pursue formal legal action over Realco's fee structures and management practices remains unclear, as does how many of the company's roughly 25 remaining assets might face imminent bank takeovers or fire-sale liquidations. For now, Eastpoint stands as the most visible marker of how far the reversal has gone for a firm that, just a few years ago, was one of Israel's most prominent names in U.S. real estate.
