Jackson Square Location Proves Valuable When Asset Trades
Brick and Timber Collective LLC recently snapped up 900 Kearney for $27 million from sellers Newcastle Partners Inc. and partner Drake Real Estate Partners after the JV’s successful renovation campaign.
SAN FRANCISCO—Built in 1989, 900 Kearny St. is located in the Jackson Square submarket near public transportation, retail, restaurants and executive housing. Buyer Brick and Timber Collective LLC recently snapped up the asset for $27 million.
Newcastle Partners Inc., a San Francisco-based real estate investment and development company, together with its partner Drake Real Estate Partners, sold the 30,000-square-foot six-story office building. The joint venture acquired the asset in March 2017 for $17 million.
“When this incredible investment opportunity came up with a quality partner like Newcastle, we were able to quickly commit our equity to the deal,” David Cotterman, co-founder and managing partner of Drake Real Estate, tells GlobeSt.com.
The JV then embarked on adding value to the property by creating open office spaces and single-floor suites.
“Ultimately, we successfully created a new look and identity for the building and added significant value by attracting full-floor tech tenants,” Jonathan Garonce, partner at Drake Real Estate, tells GlobeSt.com.
As Garonce mentions, the renovations were successful in sparking leasing activity and resulted in the signing of several successful tech companies. The asset is now 100% occupied by EastWest Bank, Bitmami and Novani, among others.
Ben Bullock, David Dokko and Thomas Foley of HFF represented Newcastle Partners in the sale.
“Jackson Square is strategically located at the intersection of North Beach, the north Financial District and Chinatown,” said Dennis Higgs, managing partner and founder of Newcastle Partners. “With an office vacancy hovering around 3%, Jackson Square is a vibrant, thriving submarket that has proven to be the best in the city. San Francisco continues to see the highest rents and lowest vacancy in the country and Newcastle Partners will continue to pursue value-add and core office property opportunities here.”
Indeed, the San Francisco investment market continues to experience strong activity, especially during the second quarter of 2019 with nine buildings transacting for an aggregate investment volume of more than $1.2 billion, according to a report by Colliers International. The largest sale transaction of the second quarter was 123 Mission purchased for $397 million or $1,149 per square foot by Main Mission LLC. Another notable transaction was the sale of 945 Bryant St., a class-B office building located in SOMA which closed for $41.95 million or $1,005 per square foot, says Colliers.