AIG, Associated Estates Enter JV to Build $220M M-U Development in San Francisco
- Mar 25, 2014
AIG Global Real Estate and Associated Estates Realty Corp. have entered into a 50:50 joint venture partnership to build a 3.4-acre site at Eighth and Harrison streets in San Francisco.
The project will be called 350 Eighth St., which is located in the South of Market (“SoMa”) neighborhood of San Francisco. The development will be a key component of the proposed Western SoMa development plan.
The former bus parking lot, previously owned by Archstone Enterprise L.P. and later bought by Associated Estates last year, will be turned into an eight-building, mixed-use development consisting of 410 rental apartment homes and 40,000 square feet of office, retail and art space. Site work has already started and first occupancy is scheduled for the fourth quarter of 2015, according to a CBRE news release.
“When AvalonBay and EQR bought Archstone, they decided not to move forward on a number of their development projects and this was one of them. Associated Estates found out about the opportunity and moved forward on it,” Brian Eisendrath, CBRE’s chairman of Debt & Structured Finance group told Commercial Property Executive.
Associated Estates hired Eisendrath to find the company a partner in the transaction, which he did. The total project will cost around $220 million, he said.
“They’re both very well-known firms. Associated is a long-term owner and we matched them with capital that was also long-term through AIG. Given the similar profiles in the two companies I thought it would be a great fit,” Eisendrath added.
The eight buildings of the 350 8th Street project would rise five and six stories with the majority of the proposed multi-family units (168 two-bedrooms, 196 one-bedrooms, and 46 studios) located over ground floor retail or commercial, according to SocketSite.
The project will sit across Harrison Street from the H2O loft building and the Ironworks loft building. The site will also hold a 4,509-square-foot public park with a cafe and 44,500 square feet of open space. The design places taller structures along the busy corridors of 8th and Harrison streets while reducing the scale along the side and rear alley Gordon Street, according to Kava Massih Architects working on the project.
“(AIG’s) outstanding reputation and experience as a joint venture partner in multi-family projects brings tremendous value to our development,” said Jason Friedman, senior vice president of Acquisitions & Development, Associated Estates said in the news release. “Together we recognize the significant upside from this unique development opportunity in the high barrier to entry (of the) SoMA submarket fo San Francisco.”