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SAN FRANCISCO-Ellis Partners has acquired a vacant 100-year-old office building here that is entitled for a conversion to residential condos, but it won’t be following through with the conversion. Instead, the locally based developer will be re-improving the 99,186-sf property at 717 Market St. for office use.

“The office market has moved beyond the residential market as far as property values are concerned,” says one local investment broker who heard the sale price was “in the $18-million range.” The listing brokers–Frank Wheeler, Tony Crossley and Tim Maas of Colliers International–declined comment on the transaction, citing confidentiality agreements.

Ellis Partners director of acquisitions Gordon Hess tells GlobeSt.com that the class C office building will undergo a “substantial renovation” and be put back on the market as class B office space in the middle of 2007. The expectation is that improving market conditions will allow Ellis Partners to take advantage of escalating rental rates.

The seller of 717 Market was Portland-Pacific Market LLC, which is led by Chris Zupsic. Portland-Pacific acquired the building in November 2004. Zupsic’s purchase price was not immediately available.

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