SAN FRANCISCO—Built in 1927 as the Crane Company Warehouse building, MCM Real Estate Services, part of Manchester Capital Management LLC, acquired 634 Second St. in 2007 and completed significant base building renovations and improvements in anticipation of cloud computing company Okta's tenancy. The property has been fully upgraded with large floor plates, high ceilings, new elevators, indoor bicycle storage and a private rooftop deck. The creative tenant finishes showcase the floor plates and abundant natural light.

The property is in the SoMa area, located two blocks from AT&T Park, near the new Warriors arena site and close to prominent restaurants, as well as the corporate headquarters of numerous technology firms such as Dropbox, GitHub and Lyft.

New York-based developer, Thor Equities recently closed on the acquisition of the building for $40 million. The three-story brick-and-timber building includes more than 45,000 square feet of class-A office space occupied by Okta and approximately 1,720 square feet of ground floor retail space leased to SAJJ Mediterranean.

“We continue to believe strongly in the real estate market in San Francisco, and 634 Second St. presented us with an ideal opportunity to own a prime property in SoMa, the most in-demand office submarket in the city,” said Joseph Sitt, CEO of Thor Equities.

Newmark Grubb Knight Frank capital markets' executive managing directors Kyle Kovac, Michael Taquino and Daniel Cressman advised MCM in the property's disposition and were joined by Newmark Cornish & Carey's executive managing directors, Michael Brown and Bill Benton, who also represented MCM in the successful lease-up of the property. As part of the transaction, Thor also engaged NGKF to both secure its acquisition financing and begin the property management of the asset moving forward.

“Thor is acquiring one of the premier creative office buildings in San Francisco,” Kovac tells GlobeSt.com. “Per the underlying zoning, the property also has the potential to add two more floors to the existing improvements.”

634 Second St. is accessible to public transportation including Caltrain as well as Interstates 80 and 280.

“Ideally positioned on the Second Street Corridor of San Francisco's South of Market Area, 634 Second St. lies within the most innovative and mature technology submarket in the country,” said Kovac. “The creative property is proximate to the best and most diverse amenity base in the city.”

This sale represents MCM's second San Francisco property to trade hands in the past two weeks, following the recent sale of 200 California to a private family trust, also handled by NGKF capital markets. Thor Equities has invested heavily in the San Francisco, Silicon Valley and Oakland markets during the past year. Notably, Thor Equities sold the historic Phelan Building at 760 Market St. last year for $374 million. Thor owns a number of properties in San Francisco including 152 Geary St. in the heart of Union Square, as well as 440 Jackson St. and 444 Jackson St.

634 Second St. is accessible to public transportation including Caltrain as well as Interstates 80 and 280.

Instant Insights /

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