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SAN FRANCISCO- TMG Partners, one of the San Francisco Bay Area’s largest mixed-use property developers, has acquired the 485,000-sf One South Van Ness office building here from American Financial Realty Trust. The purchase price was not disclosed, but sources familiar with the transaction tell GlobeSt.com that TMG paid just under $80 per sf, which equates to about $38 million. AFRT acquired the former data center from Bank of America last year for about $44 million, according to published reports.One South Van Ness is an eight-story class A building located mid-market near Civic Center and on transit with Muni, Metro, and BART. Built in 1950, it was acquired by BofA in 1983 for use as a data center. BofA rehabbed and seismically upgraded the building in 1989. Aside from BofA, which is in the process of vacating its 300,000 sf in the building, the significant tenants in the building are California Pacific Medical Center (77,000 sf) and the State Compensation Insurance Fund (60,000 sf).TMG chief executive Michael Covarrubias tells GlobeSt.com he expects the building to be prime space for corporate users needing large floor plates, in part because TG was able to acquire the property at 25% of replacement cost, which will allow for competitive rental rates and healthy tenant improvement allowances. “From our perspective, it was an opportunistic investment based on its price and the improving marketplace,” says Covarrubias. “I don’t know anybody that owns a class A property in this market for less than $80 per sf.”TMG is known for its risky rehabs, which include The Landmark at One Market. The 400,000-sf former Southern Pacific headquarters required extensive renovations but has attracted tenants. As with its other properties, TMG will self-manage One South Van Ness. Jones Lang LaSalle SVP Wesley Powell and associate Jennifer O’Connell have the leasing assignment. TMG paid all cash for the building and is just now out in the marketplace to source its own financing, says Covarrubias. According to published reports, TMG likely will partner with one of its longtime funding sources, a group that includes Farallon Capital Management.

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