X

Thank you for sharing!

Your article was successfully shared with the contacts you provided.

SAN FRANCISCO-Scanlan Kemper Bard of Portland, OR has acquired the San Francisco Giftcenter for $94.8 million and plans to spend $8.7 million to reposition the 388,324-sf, two-building property. The real estate merchant banking firm sees an opportunity to capitalize on the rapidly gentrifying South of Market (SOMA) area of Downtown, according to SKB president Todd Gooding.

The San Francisco Giftcenter and Jewelrymart are housed in 888 Brannan St., a five-story building developed in 1918, and 850 Brannan St., a three-story building developed in 1987. Also included in the acquisition is 925 Bryant St., an adjacent one-story, 13,125-sf warehouse constructed in 1963 that will be used to create additional parking for tenants and their customers.

The Giftcenter and Jewelrymart buildings house nearly 300 tenants who use the facilities primarily to market their products directly to retailers and interior designers. The Jewelrymart portion is 99% leased and the Giftcenter portion is 69% leased.

Gooding observes that part of the upside in the Giftcenter lies in its “significant drop in daily traffic count” and “a stubborn vacancy rate, primarily because of facility decline and the lack of a strong marketing effort.” He says that SKB believes that the property can be revitalized within a couple of years through a combination of taking care of deferred maintenance, completing significant structural and cosmetic upgrades and implementing an aggressive marketing plan.

Besides the rent from their showrooms, the Giftcenter buildings generate supplemental income from special events hosted at 888 Brannan St.’s five-story atrium, known as “the Pavilion” which will be completely renovated. The property also generates revenue from a billboard facing northbound traffic on US-101 and two rooftop cell phone towers, and SKB sees the prospect of additional supplemental income from the future parking contract at 925 Bryant St.

The Giftcenter complex is part of Showplace Square, a submarket of the SOMA that is the primary wholesale and interior design district servicing Northern California, Oregon and Northern Nevada. Showplace Square comprises more than 1.5 million sf of permanent showrooms, including 888 Brannan and 850 Brannan.

SKB’s capital investment in the these two buildings is expected to not only spark renewed interest in the Giftcenter but also to increase Pavilion rental income and trade show revenue. Bob Scanlan, SKB’s founder, chairman and CEO, points out that the showroom buildings have historically enjoyed long-term occupancy by their tenants due to the lack of competitive mart alternatives in the region and the critical synergy generated from housing the jewelry, gift and apparel wholesalers in one locale.

SKB acquired the Giftcenter and Jewelrymart from Pacific Union Development, which has owned and operated the buildings since 1976. Acquisition financing was provided by Wachovia Securities.

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
  • 3 free articles* across the ALM subscription network every 30 days
  • Exclusive discounts on ALM events and publications

*May exclude premium content
Already have an account?

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 © 2020 ALM Media Properties, LLC. All Rights Reserved.