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SAN FRANCISCO-The City of San Francisco has acquired One South Van Ness from TMG Partners for $71.5 million. The city, which occupies a substantial portion of the eight-story, 504,471-sf building, exercised a fixed purchase option it had obtained along with its lease agreement.

The property is located very near City Hall in the Civic Center district. Originally developed as a data processing center for Bank of America, the building was converted to office space in 1989 but continued to be owned and largely occupied by the bank until 2005. The property features a large central atrium, has unobstructed views of Twin Peaks. It is 100% occupied by the City and County of San Francisco, California Pacific Medical Center and the California State Compensation Insurance Fund.

“The lease with option to purchase structure gave the city time to stage its relocation from other city buildings where they had leases,” says Matt Field, managing partner with TMG, which acquired the building in 2004 from American Financial Realty Trust for about half the price the city paid. At the time, the building was 35% leased. Tenants included California Pacific Medical Center and the California State Compensation Insurance Fund.

TMG proceeded to expand CPMC by 50,000 sf and leased the remaining vacant space to the city in a deal that included the aforementioned purchase option. City departments in the building include the Metropolitan Transit Authority, Mayor’s Office of Housing, Mayor’s Office of Community Development, San Francisco Redevelopment Agency, 311, the Department of Parking and Traffic, and the Department of Technology and Information Systems.

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