SAN FRANCISCO-Swig Burris Equities and Stonehenge Partners has closed on their joint venture acquisition of 450 Sansome St., a 132,000-sf office property in this city’s north financial district with significant vacancy. The New York City-based firms paid GMAC Commercial Mortgage about $28 million for the 16-story building completed in 1965. GMAC took back the building this year from Meridian Investment Management Co. (now ICON Advisors and still a tenant in the building), which defaulted on its mortgage. Meridian paid more than $44.3 million for the property in the fall of 2000, when the building was largely leased up and tenants were still signing on at lease rates at or above $45 per sf. Now the building is only 60% leased and recent comps show effective rents in the building in the mid $20s. Swig Burris principal Kent Swig, who was not available Monday for comment, has said he plans to transform the 39-year-old “into a luxury boutique office building,” though he has not put a price tag on the task. The company reportedly expects to have vacancy at 10% or better within 18 months, which would raise the cap rate on the investment from about 7% to more than 9%, according to local sources. The building has 8,400-sf floor plates and a 30-slip underground parking garage. The list of planned improvements include an upgraded lobby and entrance; new elevator cabs; new core bathrooms; new sprinkler systems; and, of course, new finishes for newly signed tenants.450 Sansome will be Swig’s first San Francisco investment since 1998 when it acquired 80 Natoma, a parcel of land Swig ultimately had to give back to the lender in 2002 after the planned project for the site–a 51-story, 475-foot condominium tower called the Century–never panned out. Developer Jack Meyers later acquired the parcel and renamed the project the Hemisphere, but now is in court with the city, which is condemning the property for use in the expansion and improvement of its Downtown regional public transit hub, the Transbay Terminal.

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