Cornerstone Sells 187 KSF Former Twitter HQ in San Francisco to ASB
- Oct 11, 2013
There is hope yet for a building once its biggest tenant, social media giant Twitter moves out. Cornerstone Real Estate Advisers L.L.C. has sold one of its Class A office buildings–the six-story 795 Folsom St. in the South of Market district, a high-tech industry hub and former Twitter headquarters, for $110 million to ASB Real Estate Investments.
Cornerstone, one of the largest real estate investment managers with more than $40 billion in real estate assets under management, bought the 187,000-square-foot LEED Gold-certified building in July 2011 for $71 million. At that time San Francisco was in the recovery phase after several years of negative absorption.
Back then half of the building was occupied by popular online social networking service Twitter, which moved out in early July 2012, a year prior to the expiration of their two-yer lease. Cornerstone was aware of Twitter’s plans to move out, but that didn’t deter the company from the purchase.
“We saw some upside there, others might see it as risk, but you don’t get upside without risk,” John Kennedy, Cornerstone’s managing director told Commercial Property Executive. “We thought as a investment there were some very strong initial income returns and quite a bit of upside with the ability to release the Twitter space to another creative tech tenant.”
But Cornerstone got lucky, since growing interactive entertainment company Kabam moved in soon after, taking up the space left over from the social networking giant. The building is currently 100 percent leased, including tenants AT&T and workplace solutions group Regus, with the next lease rollover taking place in late 2014.
“It’s a creative space … large open-floor plates … it just met all their (Kabam’s) needs, and they were able to move in literally the next day,” Kennedy added.
795 Folsom is close to the city’s mass transit networks and upscale shopping. The building has a renovated high-tech lobby, exterior touch ups, such as painting, according to Cornerstone, large, flexible floor plates and high ceilings.
“We had essentially completed our value-add strategy and we saw an opportune time with respect to capital markets to put the building on the market,” Kennedy concluded
The sale to ASB Real Estate Investments, a division of ASB Capital Management, L.L.C. was done by Cornerstone’s value-added real estate fund, which invests in higher growth markets, several of which have high concentrations of employment in teh technology, energy and health sectors.