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225 Bush Trades for $310 Per SF

SAN FRANCISCO-The German real estate investment arm of Swedish Banking Group SEB pays $178.5 million for the 575,600-sf, class A historic office building in San Francisco's North Financial District.

By Brian K. Miller | Updated on April 11, 2005

SAN FRANCISCO-A 575,600-sf, class A historic office building in the city’s North Financial District has changed hands for $178.5 million or about $310 per sf. SEB Immobilien-Investment GmbH, the Frankfurt, Germany-based real estate investment arm of Swedish Banking Group SEB, acquired the asset from a joint venture of Whitehall Street Real Estate Funds, GEM Realty Capital & Flynn Properties. The building is 94% leased to several credit tenants. The largest tenant is a division of NBC Universal that occupies 40% of the building under a lease the runs for another five years, which leaves time for market recovery. The building has 25,000-sf floor plates and two levels of underground parking. Based on in-place numbers, the capitalization rate on the investment is in the low 7% range, local industry sources tell GlobeSt.com.Daniel Cressman, Edward Suharski, Edmund Najera and Robert Dumas of Grubb & Ellis’ San Francisco office represented the seller in the transaction. James Stein and John Herr of Lincoln Property Co. represented the buyer. The sale closed earlier this month.Suharski tells GlobeSt.com that about 200 offering memorandums were sent out and 20 solid offers came back. When the property last traded in 2000, Suharski says the property attracted only five offers and traded for $144.5 million. “This time around the capital is much more aggressive, which is compressing cap rates, the building’s occupancy is higher and NBC Universal now owns the major tenant in the building,” Suharski says.SEB’s plans for the building is “to take it to the next level and return it to its former splendor,” Suharski says Suharski didn’t have specifics, but expects that will include a lobby renovation and some facade work, among other things. A buyer’s representative was not immediately available Monday afternoon for comment.

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