In March, a fund managed by Shorenstein Properties LLC acquired Market Square in San Francisco for approximately $124 per square foot, or just around $110 million. The 1.1-million-square -foot building is a historic structure with a full block of retail and high-tech commercial space. Shorenstein intends to revamp the property into a class A office facility with retail amenities, large floor plates, high ceilings, Art Deco features and underground parking.
“It’s the kind of space that will be appealing across the country to technology companies that may want to locate in San Francisco,” says Glenn A. Shannon, president of Shorenstein. Accordingly, Twitter has already signed a letter of intent to move its headquarters there. But the deal has gotten some flack lately because of tax incentives it may receive from the City of San Francisco.
The renovation calls for a capital expenditure of about $100 per square foot—money the company intends to secure from the construction finance markets. It is now a few weeks past the acquisition, and Shannon apparently has not gotten the word that the construction finance market is supposedly dead...
...To read the rest of the story, go to the April 2011 issue of Real Estate Forum.
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Erika Morphy
Erika Morphy has been writing about commercial real estate at GlobeSt.com for more than ten years, covering the capital markets, the Mid-Atlantic region and national topics. She's a nerd so favorite examples of the former include accounting standards, Basel III and what Congress is brewing.
