GlobeSt.com UPDATE: Divco West Acquiring 770,000-SF Market Center

SAN FRANCISCO-The largely vacant 770,000-sf Market Center development in Downtown San Francisco is being sold for about $80 million to a new fund of Divco West Properties, a Palo Alto, CA-based private real estate investment, development and management firm with a 10 million-sf portfolio.

The two-tower property came to market this spring in a lender-driven disposition that followed a loan default by building owner Tishman Speyer Properties, which paid $190 million for the property in 1999. Sources tell GlobeSt.com that Divco West “will go hard next week,” meaning its refundable deposit will become nonrefundable. The sale is scheduled to close escrow in the next couple of weeks.

With $160 million in financing from Morgan Stanley Dean Witter, Tishman-Speyer acquired the former Standard Oil of California headquarters in 1999 for $190 million and proceeded to fill it up with Internet-related tenants that were paying rents as high as $70 per sf per year. By early 2001, however, the dot-com boom was bust and the 1970′s development was back to half empty.