SAN FRANCISCO-Broadreach Capital Partners has picked up two class B office buildings here in separate transactions totaling approximately $101 million. Both transactions are value-add propositions for Broadreach, a Palo Alto-based real estate private equity firm formed in 2002 by the former executive team of Spieker Properties, which was acquired by Equity Office Properties in 2001 for $7.2 billion.

In the larger of the two deals, Broadreach paid Bay Pacific Corp. $58 million or $295 per sf for a 10-story, 196,630-sf (net rentable) building that sits at 550 Kearney St. in the North Financial District. The first six stories of the building were built in 1956, the remainder in 1981. The property includes subterranean parking for approximately 150 cars. The property is 50% leased.

Broadreach senior director Trevor Wilson, who oversees the firm’s investment activities in San Francisco and the Pacific Northwest, tells GlobeSt.com the bulk of the vacancy came in 2006 when the building’s primary tenant, a federal bankruptcy court, vacated the premises. “What it allows us to do is go in and put traditional office tenants in the building,” says Wilson, adding that class B office rents in the area range from the high $30s- to mid-$40s per sf, full service.

In the other deal, Broadreach paid Archstone-Smith $42.7 million or $197 per sf for the 216,600-sf (net rentable) office component of Fox Plaza, a 29-story, mixed-use tower built in 1964 in the Civic Center section of the South of Market (SOMA) neighborhood. Located at 1390 Market St., the building’s office space is located on the first 12 floors and is 84% occupied. The upper floors contain residential apartments.

Wilson says Broadreach put the building under contract in the middle of 2006 but couldn’t close until last week because it took that long to legally separate the office from the residential portion of the project. “Archstone-Smith wasn’t very interested in the office portion and few were looking at it because it was part of a greater whole,” Wilson says. “it was an opportunity to acquire 216,000 sf of office at a discount to market pricing.”

Both properties will receive exterior and common-area improvements. Cornish and Carey has been handed the leasing assignment for 550 Kearny and Cushman & Wakefield will handle leasing at 1390 Market St. Colliers will handle the property management assignment for both assets.

Want to continue reading?
Become a Free ALM Digital Reader.

Once you are an ALM digital member, you’ll receive:

  • Unlimited access to GlobeSt and other free ALM publications
  • Access to 15 years of GlobeSt archives
  • Your choice of GlobeSt digital newsletters and over 70 others from popular sister publications
  • 1 free article* every 30 days across the ALM subscription network
  • Exclusive discounts on ALM events and publications

*May exclude premium content
Already have an account?


NOT FOR REPRINT

© 2024 ALM Global, LLC, All Rights Reserved. Request academic re-use from www.copyright.com. All other uses, submit a request to [email protected]. For more information visit Asset & Logo Licensing.

 

GlobeSt

Join GlobeSt

Don't miss crucial news and insights you need to make informed commercial real estate decisions. Join GlobeSt.com now!

  • Free unlimited access to GlobeSt.com's trusted and independent team of experts who provide commercial real estate owners, investors, developers, brokers and finance professionals with comprehensive coverage, analysis and best practices necessary to innovate and build business.
  • Exclusive discounts on ALM and GlobeSt events.
  • Access to other award-winning ALM websites including ThinkAdvisor.com and Law.com.

Already have an account? Sign In Now
Join GlobeSt

Copyright © 2024 ALM Global, LLC. All Rights Reserved.