AREA Buys Way into Downtown; Foundry Square Price Breaks Records
- Sep 27, 2011
AREA Property Partners has recently made its mark on the San Francisco multifamily scene by acquiring a 422-unit portfolio. The portfolio, comprising units in 20 buildings, was previously owned by the Lembi family. The seller, although undisclosed, is most likely a servicer that took over the properties after the former owner defaulted on a commercial mortgage-based securities loan, The San Francisco Business Times reports.
AREA partner James Simmons was quoted by the same business publication as saying that the company’s strategy in regards to its new properties will remain that of revitalization, rehabilitation and repositioning. The 20 buildings are mostly located in the downtown and Tenderloin neighborhoods, with a couple of properties placed in Pacific Heights, Russian Hill and Potrero Hill. The portfolio, which boasts an occupancy rate of 95 percent, totals 278,395 square feet. The buildings, built between 1911 and 1965, are mostly rent-regulated, making AREA’s new portfolio a seemingly workforce-oriented set of properties.
On the office front, the Foundry Square building at 500 Howard St. is up for sale. Eight years ago the building, commanded an impressive $500 per square, foot which represented a South of Market record. Now, almost a decade later, the building is slated to increase those already impressive rates. The price for the 232,000-square-foot building will most likely surpass $700 per square foot–and some expect it to top $800. The huge asking price is motivated by tenants such as Gymboree and Oracle, a company that still has five years left on its 15-year lease. Considering Oracle’s deal, there’s still $50 million in revenue to be generated, a fixture any buyer would be happy to own.