ASB Partnership has acquired the iconic 103,000 square foot office-warehouse for its Allegiance Real Estate Fund, with HFF representing the seller, Jessica McClintock, Inc.

SAN FRANCISCO—ASB Real Estate Investments has acquired 1400 16th Street, a historic 103,000-square-foot office-warehouse in the Showplace Square/Potrero Hill district.

ASB made the acquisition on behalf of its Allegiance Real Estate Fund, a $3.5 billion open-end core investment vehicle, in joint venture with SKS Partners, LLC and ProspectHill Group. The partnership plans an extensive redevelopment to reposition the interconnected, three-building complex into highly attractive space for R&D, prototyping and manufacturing companies with 14-foot ceilings, open floor plates, exposed timber beams, skylights, an interior atrium, and a large roof deck. The property was sold by Jessica McClintock, Inc., an iconic San Francisco based fashion designer and dress manufacturer, which has owned and occupied the building as its corporate headquarters for the last 40 years. The seller was represented by HFF.

Originally built in 1938, the property spans an entire city block bounded by 15th, 16th, Carolina and De Haro Streets,  and is comprised of a two-story, Art Deco office building, which was later expanded into a two-story 30,000 square-foot office–warehouse, and a single-story 73,000 square-foot warehouse. Future tenants will have excellent access to public transportation — bus, light rail, BART and CalTrain — as well as immediate access to Interstate 280 and Highway 101.

David Quigley, CIO of ASB Real Estate Investments, said: “The property’s location is primed to take advantage of the local boom in demand for space that can accommodate the needs of modern R&D, prototyping and manufacturing space in a part of the city that has long been associated with those uses. It also sits adjacent to some of the most desirable residential areas in the city.”

Among industry-leading companies operating from adjacent SoMa and Mission Hill districts are Adobe, Advent, Airbnb, Cisco Systems, Dolby Laboratories, Fox Interactive, Google, SEGA, Twitter, and Zynga. The property is also within a half mile of the UCSF Mission Bay Research and Development campus, one of the nation’s leading biomedical research institutions, and the soon to be built Warriors arena.

The HFF investment sales team representing the seller was led by managing director Steven Golubchik, director John Simerlein and senior real estate analyst Josh DiSalle.

“The SoMa and Potrero Hill districts are home to one of the largest R&D, prototyping and manufacturing tenant clusters in the city.  The opportunity to transform the property into one of the area’s most iconic adaptive re-use buildings coupled with the ability to acquire a whole city block in San Francisco led to strong interest from groups both locally and nationally,” Golubchik said.

“We are seeing strong leasing velocity in the area along with a surplus of demand, specifically within the Potrero Hill / Showplace Square neighborhoods and for PDR-type users, and are witnessing a substantial uptick in PDR rents.  Further, the property’s ideal location, and proximity to San Francisco’s most rapidly evolving neighborhoods with a mixture of housing, jobs, entertainment destinations, and transportation options – combined, provide a 24/7 live, work and play environment,” added Simerlein.

ASB Real Estate Investments manages five other investments in San Francisco totaling 405,000 square feet: 200 Powell Street, a retail asset; the 795 Folsom office building; 135 Mississippi St., a creative office building; 989 Market Street, a recently-acquired office investment, and apartments at 333 Fremont St. An ASB land holding at 350 Bush/500 Pine was sold in April.