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SAN FRANCISCO-Sterling American Property has acquired a portfolio of unstable Bay Area office properties for $329 million. The real estate investment arm of New York Mets owner Fred Wilpon acquired the four-property portfolio from Equity Office. The portfolio totals 1.36 million sf, of which 729,214 sf is empty for a overall 53.4% vacancy.Sterling acquired the portfolio with its Sterling American Property Fund IV and with Hines as a 10% partner. The four properties are 301 Howard St., Foundry Square II, Parkside Towers and San Rafael Corporate Center. The first two are in the San Francisco’s South Financial District; the other two are in Foster City and San Rafael, respectively. The least vacant property is 301 Howard St., a 23-story 307,596-sf class A office building built in 1998 that is about 30% vacant. The most vacant is Parkside Towers, a complex of two four-year-old, five-story buildings in the 1000 block of East Hillside Blvd. with 398,460 sf of leaseable space that is 84% vacant. Foundry Square is a 10-story, 502,424-sf class A office building at 405 Howard St. that was built in 2002 and is about 41% vacant. San Rafael Corporate Center is a 155,318-sf complex of two three-story buildings in the 700 block of Lincoln Avenue that was completed in 2002 and is currently 62% vacant.Wilpon says the properties’ respective occupancies are well below their respective submarkets, giving the potential for significant upside through lease up. “Based on San Francisco’s last five quarters of positive rental growth and absorption, we strongly believe we will rapidly improve the portfolio’s occupancy,” he says in a prepared statement. Because the announcement was made late Friday afternoon none of the parties involved could be reached for further comment. Sterling American Property, a real estate investment affiliate of Sterling Equities and American Securities LP, has acquired more than $2.5 billion of assets since 1991. Hines controls assets valued at about $11 billion. Secured Capital represented EOP in the transaction. Sterling American and Hines represented themselves. Hines will assume the on-site property management responsibilities for the portfolio.

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