SAN FRANCISCO—In the next few weeks, Blackstone Group LP will put the landmark Ferry Building, two other properties and some smaller holdings on the market. Eastdil Secured has been hired by Blackstone to identify buyers.

The Ferry Building is configured in a ground lease from the Port, which has a controlling interest in the building, GlobeSt.com learns. The waterfront jewel with its iconic clock tower is expected to source a new buyer as technology companies and other tenants seek more flexible leases and top-notch amenities.

The disposition comes a decade after Blackstone's $39 billion purchase of Equity Office Properties Trust. With the sale of the Ferry Building and other holdings, Blackstone stands to triple its $3.8 billion equity investment, according to those familiar with the investment but requested to remain anonymous.

Opening in 1898, the clock tower has been the centerpiece of the waterfront for more than 100 years. With its strategic location at the foot of Market Street and at the center of the city's financial, banking and transportation district, the Ferry Building has a place in history as the primary portal of the city.

From the Gold Rush until the 1930s, arrival by ferryboat became the only way travelers and commuters–except those coming from the Peninsula–could reach the city. Passengers off the boats passed through the two-story public area with repeating interior arches and overhead skylights. At its peak, as many as 50,000 people a day commuted by ferry.

The opening of the Bay Bridge and Golden Gate Bridge, along with mass use of the automobile, rendered the daily commute by ferryboat obsolete. By the 1950s, the Ferry Building was used very little. The historic interior of the structure was also lost in 1955, when much of the building was converted to standard office space, GlobeSt.com learns. And, the double-decker Embarcadero Freeway cast its shadow on the building for 35 years until the 1989 Loma Prieta Earthquake. After that freeway was razed, the potential for rebirth of the building came to light.

After an extensive four-year restoration, the Ferry Building reopened to the public in March 2003 with its Marketplace organized along an indoor street, the Nave. This food hall is a favorite with locals and tourists alike, brimming with housewares, cheese, olive oil and chocolate vendors. The property also has eateries such as Gott's Roadside and The Slanted Door, which are jammed with diners most nights of the week. And, ferry terminals operate at Larkspur, Sausalito, Vallejo and Alameda, with plans for continuing network improvements and expansion.

“When it was built, all roads led to the Ferry Building. Today, it is an iconic destination that has been turned into an area with waving palm trees beckoning people there,” Alan Collenette, regional executive managing director, Colliers International, tells GlobeSt.com. “The renovation took it back to the original state, but better, as a retail arcade with various vendors.”

Having delivered more than a decade ago with high-profile office components, the Ferry Building is expected to fall into the category of creative office exits with the likely buyers being major institutional investors or well-known owner/users.

“It's expected to attract attention globally even though it's a leasehold and you aren't going to own it in the end,” Darren Kuiper, Colliers International vice president, tells GlobeSt.com. “It's a trophy asset that will be sought out by top investors in China and Europe, as was the Phelan Building, sold for $375 million or $1,250 per square foot in August 2016 to foreign capital, i.e. Hong Kong interests, targeting iconic assets.”

Instant Insights /

Ferry Building Soon to Seek New Ownership

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