Union Square Building Fetches $773 Per SF

The building, which was recently renovated and leased up, sits on Grant Street between Sutter and Post streets, directly across from Banana Republic's flagship store. A couple of buildings away are Coach and Shrives, namely DeBeers and Prada. Joe's Jeans opened in November 2008.

Joseph Lanyadoo, the broker who had the disposition assignment, tells GlobeSt.com the building is fully leased to six tenants. Most of the leases have annual 3.5% increases, he says. An online for-sale flyer for the property showed a reduced asking price of $9.1 million, which it said represented a 7.5% cap on 2009 scheduled income.

Even though a discount to the asking price, Lanyadoo says the seller is satisfied because he previously had the property in escrow to sell at $7.6 million when Nine West was the anchor retail tenant but decided against it. Lanyadoo says the property initially attracted a "much higher" offer from the ultimate buyer but as the two sides negotiated the market kept sliding.

A couple of years ago, buildings near Union Square with big-name retail anchors were trading for over $1,500 per square foot and rents for ground floor space were in the low $300s per square foot, with blended rates for multi-floor leases (including the ground floor) coming in at approximately $120 per square foot. Ground floor asking rents are now below $300, according to local sources.

In July 2007, a fund focused on high-end retail properties in major metropolitan cities has paid $70 million or $1,819 per square foot for 240 Post St., a 38,475-square-foot, four-story Union Square building being vacated by Ann Taylor. In early 2008, City Center Retail paid more than $1,300 per square foot for 33 Grant, a 6,479-square-foot two-story retail building fully occupied by two tenants, the Agnes b boutique and the Utopia Salon, whose leases at the time were scheduled to roll in 2010.