Many Creative Office Exits are at Core Plus Pricing

The Ferry Building was delivered more than a decade ago with office and retail components.

SAN FRANCISCO—A number of creative office projects have generated substantial returns for investors upon completion. Transwestern recently released a report examining the adaptive reuse developments in Boston, Chicago, Los Angeles, New York, Phoenix, San Francisco and Austin, TX. There are several examples of completed projects here, including 888 Brannan St.

Although they’ve received a lot of attention recently, creative office conversions are not new. Take for example, Chelsea Market in New York City or the Ferry Building in San Francisco, both delivered more than a decade ago with high-profile office components. What is new this cycle is the sheer volume of creative office exits nationally at core/core plus pricing with the buyers being major institutional investors or well-known owner/users, according to Michael Soto, director of research in Southern California and co-author of the report.