Tishman Speyer Keen on San Francisco
- Jun 04, 2015
Tishman Speyer has acquired 160 Spear St., a 19-story, 290,000-square-foot Class A office property in San Francisco’s South Financial District, the company announced late Tuesday. The sellers were Brookfield and Legacy Partners, a Tishman Speyer spokesperson told Commercial Property Executive, adding that Eastdil Secured represented the sellers. Financials on the purchase were not disclosed.
In early February, The Registry, a Bay Area website that covers real estate, reported that Legacy Partners, of Foster City, Calif., had put the building on the market. The site, quoting unidentified sources, estimated the likely sale price as in the $625–$650 per square range, or about $184.3 million overall.
Legacy reportedly had owned the building on a ground lease basis since 2006, but was able to buy the underlying land late last year.
The property, completed in 1984, is one block from the Transbay Transit Center, Market Street and the Embarcadero waterfront, a location that provides numerous transportation options, including BART, Caltrain, bus and streetcar services, and major highways.
It’s 95 percent leased with tenants that include The Regents of the University of California, Workday, Conversant and the GSA on behalf of the Social Security Administration.
“The San Francisco office market continues to be one of the world’s strongest, and the Spear Street corridor in the South Financial District has emerged as an office, retail and residential location of choice,” Tishman Speyer senior managing director Carl Shannon said in a release. He added that the company plans to upgrade the lobby and plaza at 160 Spear St.
San Francisco’s office market remains among the best nationwide, with growing demand driven, predictably enough, by high-tech companies, according to a 2015 forecast from Marcus & Millichap. Cap rates are among the lowest in the country, and a steadily rising market reportedly can make building owners reluctant to sell.
Overall office vacancy is predicted by M&M to decline to 8.6 percent by year-end, down 140 basis points from 2014. Rents are expected to rise on average by 8.5 percent, following a 10.3 percent jump last year.