Optibase Ltd. (Nasdaq:OBAS), today announced that on August 7, 2009, it entered into a joint venture to acquire 49.5% of the beneficial interest in the office building located at 485 Lexington Avenue in Manhattan from a subsidiary of SL Green Realty Corp. (the “Seller”). Optibase and Gilmor USA LLC, an unrelated party, are each equal partners in the joint venture through Mazal 485 LLC.

485 Lexington Avenue has over 900,000 square feet of leasable area and more than half of that space is occupied by Citibank N.A. and Travelers Indemnity Company.

The purchase price for the transaction is approximately $20,790,000 together with a loan of approximately $20,000,000 from the joint venture secured by a pledge by the Seller of an additional 49.5% interest in Green 485 JV LLC, with the Seller retaining an unencumbered 1% interest in Green 485 JV LLC.

485 Lexington Avenue has existing nonrecourse mortgage financing in the principal amount of $450,000,000 serviced by Wachovia Bank. The transactions above are subject to certain conditions including the lender's approval of the transfer of ownership in Green 485 JV LLC and the lender's approval of substitute guarantors under the loan.

Mazal 485 LLC was represented in the transaction by Howard L. Michaels, Chairman of the Carlton Group.

For a more detailed discussion on the transaction and relevant aspects of Israeli law, please see Optibase's Form 6-K as filed today with the Securities and Exchange Commission.

There is no assurance that the conditions precedent contemplated in the Sale-Purchase Agreement will be fulfilled or that the transaction will be consummated at such time or at all.

Tom Wyler, Chief Executive Officer of the Company commented "following the decision to diversify our business and enter the fixed income real estate sector we believe the current transaction is the right business opportunity for us to execute on this decision.” Tom Wyler added "We are excited about this particular transaction being our entry point into the fixed-income real estate sector in North America and we believe our shareholders would benefit from this in the long run."

About Optibase

Optibase provides video over IP solutions, specializing in video encoding, decoding and streaming for federal and state government agencies, Telco operators, enterprise organizations and the world's leading broadcast service providers. With a collection of open, standards-based products, Optibase enables its customers to take full advantage of video distribution over their IP network, ensuring superb video quality in a scale of bit-rates for simple and effective video streaming to desktops, STBs and VOD applications. Optibase has recently resolved to diversify its operations by entering into the fixed-income real-estate sector. For further information, please visit www.optibase.com.

This press release contains forward-looking statements concerning our marketing and operations plans. All statements other than statements of historical fact are statements that could be deemed forward-looking statements. All forward-looking statements in this press release are made based on management's current expectations which involve risks, uncertainties and other factors that could cause results to differ materially from those expressed in forward-looking statements. These statements involve a number of risks and uncertainties including, but not limited to, difficulties in finding suitable real-estate properties for investment, availability of financing for the acquisition of real-estate, difficulties in leasing of real-estate properties, insolvency of tenants, difficulties in the disposition of real-estate projects, general economic conditions and other risk factors. For a more detailed discussion of these and other risks that may cause actual results to differ from the forward looking statements in this news release, please refer to Optibase's most recent annual report on Form 20-F. The Company does not undertake any obligation to update forward-looking statements made herein.