SAN FRANCISCO—According to Newmark Knight Frank, San Francisco continues to be a top-performing US leasing and investment market, driven by more than 6 million square feet of tenant demand which includes many venture capital-backed technology companies. Average class-A office rents stand at $74 per square foot and vacancy remains steady at 6.1%.

In line with that intense demand, Bridgeton Holdings recently acquired 945 Bryant St. for $27 million or $647 per square foot through an off-market transaction. The property is a 41,745-square-foot office building located in SOMA leased to creative/technology tenants.

This marks Bridgeton's fifth acquisition in San Francisco and the second for 2017. Its most recent Bay Area acquisition prior to Bryant Street was 555 De Haro St. In July, Bridgeton sold the Pioneer Building for double what it paid in 2014. Bridgeton currently owns and/or operates more than 60 properties.

“Bridgeton continues to seek deep value-add office properties in the Bay Area. 945 Bryant is a fantastic addition to our holdings. The open floorplates, 15-foot ceilings and significant natural light are well-suited for creative and technology tenants. The building also features unique characteristics including ample parking and a private deck on the third floor. Bridgeton is confident that SOMA will continue attracting nationally recognized firms, furthering the district's historic growth,” said Atit Jariwala, CEO of Bridgeton Holdings.

Airbnb's headquarters is adjacent to 945 Bryant and Pinterest is located just one block away. And, more than 400 luxury residential units were recently delivered on Brannan across the street and several hundred more are expected.

“The immediate area around 945 Bryant is ripe for transformation and experiencing exceptional growth,” said Bridgeton Holdings' managing director in San Francisco, Akash Sharma.

Newmark Knight Frank's capital markets executive managing directors Kyle Kovac, Michael Taquino and Daniel Cressman, along with associate director Mandy Lee, facilitated the off-market transaction. Bridgeton secured financing with Silverpeak Argentic.

“Bridgeton recognized an excellent opportunity to acquire a well-located cash flowing asset in San Francisco, a market in which there is very little product available for sale,” noted Kovac.

With the 945 Bryant transaction, NKF's Kovac, Taquino, and Cressman represent 40% of the 2017 active or closed listings in the San Francisco office investment sales market in the range of $25 million to $150 million. Kovac expanded on the transaction and the overall investment market more in detail in this exclusive.

GlobeSt.com: How would you describe the San Francisco downtown office investment market–what are greatest challenges and opportunities?

Kovac: There is a significant supply/demand imbalance in the San Francisco market right now. The fundamentals are better than ever with record tenant activity, new construction pre-leased and very attractive debt markets. Yet, there is very little investment-grade product available for purchase. A dramatic amount of capital is pursuing this limited stock creating a “scarcity premium” for properties that are on the market.

GlobeSt.com: What made 945 Bryant so appealing to Bridgeton?

Kovac: The deal size in such a strong location made it attractive to Bridgeton. The asset was already producing an attractive income stream but Bridgeton will have the opportunity to add further value to the property over time.

GlobeSt.com: What will drive investment activity in 2018?

Kovac: We think the San Francisco investment market will continue to perform better than virtually all other gateway cities in the country. And we think more product will come available to acquire in 2018.

“The immediate area around 945 Bryant is ripe for transformation and experiencing exceptional growth,” said Bridgeton Holdings' managing director in San Francisco, Akash Sharma.

“Bridgeton recognized an excellent opportunity to acquire a well-located cash flowing asset in San Francisco, a market in which there is very little product available for sale,” noted Kovac.

GlobeSt.com: How would you describe the San Francisco downtown office investment market–what are greatest challenges and opportunities?

GlobeSt.com: What made 945 Bryant so appealing to Bridgeton?

GlobeSt.com: What will drive investment activity in 2018?

Instant Insights /

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