The property consists of the fully renovated 1907 brick andtimber Gallo Building and, added in 2001, 40,000-sf of newconstruction and a 100-slip parking garage. The three-story officebuilding has been vacant for the past couple of years, ever sinceits dot-com tenant went under. The first two floors are fully builtout. The third floor is in shell condition. The seller is Zapolski+ Rudd LLC, an investment and development company with offices inDurham, NC and Napa, CA. It acquired the property vacant in October2004 for $14 million.

The building sits directly across the street from a luxury condoproject called Brannan, where re-sales are reportedly closing at$1,400- to $1,500 per sf. Peebles plan for 250 Brannan calls fordividing the building into 45 "ultra-luxury, Soho-style" lofts andmultilevel townhouses ranging in size from 1,000- to 3,000 sf,which would provide a sellable area of between 75,000 sf and 85,000sf. Given the strong demand, Peebles says he won't be doing anypresales; he expects units to sell for "well above $1,000 per sf."Amenities include full access touchpad systems; wireless Internet;custom millwork; European-style kitchens with commercial grade gasranges; a wine cellar; oversized whirlpool bathtubs; and privatemedia rooms in the townhouse units. Other perks include full-timecouture concierge services, 24-hour security, valet, and doorman.The renovation is expected to start this fall, with the first unitsbeing ready for occupancy 12 months later. Capital out of Chicagois providing equity for the deal and Fremont Investment & Loanis providing debt.

The conversion will be the inaugural project of Peebles newestsubsidiary, Peebles Urban, which will focus on infill projectswhere it can add its ultra-luxury stamp to the market. Peebles sayshe plans to open an office in San Francisco later this year. Heplans to staff it with six people and build from there, "picking upproject executives as we pick up projects."Peebles has preservedother national landmarks including the Royal Palm Hotel, one ofSouth Beach's largest hotels, and the Residences at The Bath Club,which opened this month in Miami Beach. This fall, Peebles willbegin a $40-million renovation and conversion of downtown Detroit'shistoric 1920's Lafayette Building into luxury condominiums. In theBay Area, although not a conversion, the company is in thepre-development stage for an 87-acre development fronting thePacific Ocean in Pacifica, CA.