A local family is pitching two adjacent San Francisco office buildings as value-added plays.
The buildings, at 221 Main Street and 101 Howard Street in the South Financial District, encompass 453,000 square feet. Their value is estimated at about $190 mil¬lion, or $419/sf. Investors can bid on either or both. CAC Group is marketing them for the Booth family.
While the average occupancy rate is 96%, the owner is playing up the fact that leases on 70% of the space roll over within four years. That is expected to appeal to value-added investors because rising demand for San Francisco office space is driv¬ing up rents.
In fact, local pros said that properties delivered empty or nearly vacant are fetch¬ing premiums because they can capitalize on the growing demand for large blocks of space by expanding technology companies. Asking rents for Class-A office space in San Francisco are $41.71/ sf, up 12.3% from a year ago, ac¬cording to Jones Lang LaSalle.
The building at 221 Main Street has 363,000 sf, and the com¬panion property has 90,000 sf. They were part of a three-prop¬erty portfolio that the Booth family shopped in 2008, as the market was tanking. It ended up selling the 371,000-sf build¬ing at 211 Main Street to Los Angeles fund shop CIM Group for $112 million, or $302/sf, but pulled 101 Howard and 221 Main because bids were disappointing.
Meanwhile, opportunistic investors are getting a crack at a small office building in an emerging submarket of the city. The 82,000-sf property, at 995 Market Street, is just 50% leased. Local pros expect bids to come in at about $170/sf, or $14 million. Grubb & Ellis is marketing it for Apton Properties.
The 15-story building is in the Mid-Market submarket, an area that has started to attract technology companies and other tenants looking to avoid the higher rents in San Francisco’s traditional office strongholds. Social network Twitter recently signed a lease in a nearby building, for example. The city has given the neighborhood a push by offering tax breaks to busi¬nesses that move in.
The buildings, at 221 Main Street and 101 Howard Street in the South Financial District, encompass 453,000 square feet. Their value is estimated at about $190 mil¬lion, or $419/sf. Investors can bid on either or both. CAC Group is marketing them for the Booth family.
While the average occupancy rate is 96%, the owner is playing up the fact that leases on 70% of the space roll over within four years. That is expected to appeal to value-added investors because rising demand for San Francisco office space is driv¬ing up rents.
In fact, local pros said that properties delivered empty or nearly vacant are fetch¬ing premiums because they can capitalize on the growing demand for large blocks of space by expanding technology companies. Asking rents for Class-A office space in San Francisco are $41.71/ sf, up 12.3% from a year ago, ac¬cording to Jones Lang LaSalle.
The building at 221 Main Street has 363,000 sf, and the com¬panion property has 90,000 sf. They were part of a three-prop¬erty portfolio that the Booth family shopped in 2008, as the market was tanking. It ended up selling the 371,000-sf build¬ing at 211 Main Street to Los Angeles fund shop CIM Group for $112 million, or $302/sf, but pulled 101 Howard and 221 Main because bids were disappointing.
Meanwhile, opportunistic investors are getting a crack at a small office building in an emerging submarket of the city. The 82,000-sf property, at 995 Market Street, is just 50% leased. Local pros expect bids to come in at about $170/sf, or $14 million. Grubb & Ellis is marketing it for Apton Properties.
The 15-story building is in the Mid-Market submarket, an area that has started to attract technology companies and other tenants looking to avoid the higher rents in San Francisco’s traditional office strongholds. Social network Twitter recently signed a lease in a nearby building, for example. The city has given the neighborhood a push by offering tax breaks to busi¬nesses that move in.