SAN FRANCISCO—As reported Thursday, 225 Bush St. has changed hands. In an update to that story, we learned that Kylli Inc., a Chinese development firm backed by Genzon Group and its principal, is now the majority joint venture partner in the sale transaction.

Flynn Properties and GEM Realty Capital were the JV sellers. Flynn Properties will remain an investor in the new joint venture as well as the property manager and leasing agent for 225 Bush Street. 

Steven Caravelli, an agent at Coldwell Banker Commercial NRT served as one of the brokers on the deal. He tells that he has seen interested in the office market here from all types of investors to either break into or increase their holdings in the financial and SOMA districts of the city. “As you have seen rental rates are steadily rising for class A and class B spaces. I believe the sellers of 225 Bush were planning to formally come to market this year and our transaction fit their needs and expectations with minimum disturbance.”

Flynn Properties and GEM Realty have a long history with 225 Bush, having owned it from 2000 to 2005 in partnership with Whitehall-Goldman Sachs. Then, from 2012 until the present, Flynn and GEM Realty owned the property with SEB ImmoInvest. GEM Realty and SEB sold their entire stakes as part of the sale transaction.

“225 Bush Street has the basic real estate characteristics to effectively capture today’s burgeoning creative tenant demand base,” says Greg Flynn, president and CEO of Flynn Properties. “The business plan we executed in our most recent ownership period included refreshing the amenity set while repositioning the property to showcase its high ceilings, natural architectural elements, and large floor plates of 26,000 square feet, which uniquely support the open plan configurations of today’s higher density users.”

JLL identified Kylli Inc. as Flynn Properties’ new joint venture partner and provided support on this cross-border transaction. “We’ve seen increasing interest from Chinese buyers in trophy office buildings in global gateway cities for several years, with a focus on London and New York to date. This large, off-market transaction shows that Chinese investors are also aggressively pursuing class A office buildings on the West Coast of the US” said Rob Hielscher, managing director leading the JLL Capital Markets team. 

As previously reported, originally the headquarters of Standard Oil, 225 Bush St. was built in 1922 and is a 583,000-square-foot 22-story class A Historic office building in the San Francisco financial district. The property is located just north of Market Street. 

225 Bush was 68% occupied at the time of the Flynn Properties and GEM Realty acquisition in 2012, and is currently 99% occupied, stabilized with numerous long term leases.

Since acquisition, Flynn Properties has secured more than 250,000 square feet of new tenancy at the building, including companies such as Lithium Technologies, Groupon, Zillow,, Meltwater, and RocketSpace, among others. Flynn added, “While the property has been stabilized, there remain significant value creation opportunities in the years ahead through further property enhancement and management of lease expiration, and we are excited to shepherd 225 Bush Street through its next phase while maintaining an ownership position.”