SAN FRANCISCO, CA—A joint venture between certain affiliates of Westport Capital Partners LLC and Cannae Partners LLC have closed on the sale of 1019 Market St. The buyer, a global investment manager, paid $48.25 million for the property and assumed the property free and clear of debt.
HFF represented the seller of the 75,523-square-foot building. The transit-oriented creative office property is located in San Francisco's Mid-Market District.
Originally built in 1909, 1019 Market was completely re-constructed in 2013. The redeveloped property blends historic features such as classical Corinthian-style columns, exposed brick and timber interiors, and floor-to-ceiling glass line with modern stadium-like collaborative meeting areas, high-end creative office space finishes and an exterior LED lighting system.
The building 100% leased on a long-term basis to cloud-based customer service firm Zendesk, with a small ground floor NNN retail tenant signed up for 10 years. The seven-story property is situated within one block of both the Civic Center and Power Street BART/Muni subway stations and two blocks from the future Central Subway project providing access to Caltrain with connections to the Peninsula and Silicon Valley.
The HFF investment sales team representing the seller was led by managing directors Steven Golubchik and Nicholas Bicardo, directors John Simerlein and Nathan Blair and senior real estate analyst Josh DiSalle. GlobeSt.com could not connect with sources involved by deadline, but will update the story as we learn more information.
Westport Capital Partners LLC is a real estate investment firm specializing in the opportunistic real estate arena. Through its various funds, the firm invests in a wide variety of distressed and opportunistic real estate assets. San Francisco-based Cannae Partners LLC is a private real estate company that invests in value-add properties on the West Coast, principally in the San Francisco Bay Area. Cannae invests on its own behalf as well as in conjunction with institutional partners and high net worth individuals.
As GlobeSt.com previously reported, the Mid-Market region is the hottest thing in San Francisco at the moment, adjacent to Union Square. Robert Bellinger, president and CEO of ASB Real Estate Investments, recently noted that “Led by Twitter, Spotify, Yammer and Intuit, new and expanding technology companies have made the Mid-Market District a location of choice, leading to a market renaissance, from which our investors can take advantage. The property's proximity to Union Square and the extension of premier retailing along Market Street also translates to great long-term fundamentals for the retail space.”
As GlobeSt.com previously reported, in 2013, roughly 800,000 square feet was occupied by tech companies either migrating (or expanding) from Silicon Valley to San Francisco. Mid-Market has seen an increase in activity: Twitter led the charge with its headquarter move in early 2013 and is looking to expand. As the technology sector continues to grow, look for Mid-Market to become the new tech hot spot, says brokerage firm Avison Young.
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