JV Seals Parcel F Deal in San Francisco
- Jun 28, 2016
San Francisco—F4 Transbay Partners LLC—a joint venture between Hines, Urban Pacific Development LLC, and Goldman Sachs affiliate Broad Street Principal Investments LLC—has completed the acquisition of the highly coveted Parcel F, a spot of land neighboring the Transbay Joint Powers Authority’s multi-billion-dollar Transbay Transit Center project. F4 paid TJPA $160 million for the high-profile site, where it will erect a mixed-use skyscraper.
There’s a reason why Parcel F attracted highly competitive bids from both the U.S. and international investment community—actually, there are two reasons. Not only is the land the last of three parcels that can be directly connected to the Rooftop Park segment of the Transbay project, it is the last developable site in downtown San Francisco zoned for a “super-tall” (550 feet-plus) structure. The F4 building will be 750 feet tall upon completion.
F4’s transaction with TJPA also includes a $15 million premium in the event of an assemblage of the land with the adjoining lot at 540 Howard. Additionally, the city’s Office of Community Investment and Infrastructure Commission and Board of Supervisors have just granted F4 exclusive negotiating rights to acquire the nearby Block 4 housing development site from TJPA and OCII. So F4 expects to be more than a little busy altering the skyline near Transbay in the not-too-distant future.
“F4 Transbay Partners believes this last remaining site available for development of a tower in the Transit Center District Plan area is an opportunity to provide needed hotel rooms, housing, and Class A office at the intersection of the Yerba Buena cultural district, burgeoning Rincon Hill residential neighborhood, and the new epicenter of West Coast business activity,” Chris Collins, principal with Urban Pacific, told Commercial Property Executive.
At Parcel F, F4 plans to erect a 60-story, 750-foot tall building featuring 250,000 to 425,000 square feet of office space, 200 to 300 hotel guestrooms and 200 residential units. The joint venture has tapped Pelli Clarke Pelli Architects and HKS Architects to design the project. The plan for Block 4, which will be available for development after the new transit center opens, entails a 45-story residential tower adorned by mid-rise residential buildings around its base. And between the two projects, F4 expects to handily meet, if not exceed, the required minimum amount of affordable housing units as mandated by current San Francisco law.
With a strong vision in mind for Parcel F and Block 4, F4 is sitting on top of the world. Yet, the joint venture came amazingly close to never reaching this point.
In November 2015, TJPA announced the pending sale of Parcel F to real estate developer Crescent Heights for $165 million plus a $20 million assemblage bonus for 540 Howard. However, the following month, Crescent walked away from the deal in what has been widely reported to be a dispute over the required percentage of affordable housing in the proposed project. Crescent’s retreat opened the door for F4, and in March of this year, TJPA announced the new deal.
The completion of the Parcel F transaction is not just a big deal for F4, it’s a momentous occasion for TJPA as well. With proceeds from the sale in hand, the funding for the $2.3 billion Phase 1 of Transbay, or the “Grand Central Station of the West,” is now in place.