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Mission Bay Office Building Fetching $605 Per SF

SAN FRANCISCO-Leased long-term by clothing retailer Gap Inc., the 282,733-sf, six-story building here is put under contract for $171.1 million by Tishman Speyer Office Fund, which is publicly traded on the Australian Stock Exchange.

By Brian K. Miller | Updated on October 18, 2005

SAN FRANCISCO-A six-story office building on Mission Bay that is leased long-term to clothing retailer Gap Inc. is under contract for $605 per sf. The buyer is Tishman Speyer Office Fund, which is publicly traded on the Australian Stock Exchange. The seller is a joint venture of ProLogis and Secured Capital. The sale is scheduled to close on Nov. 1.

The 282,733-sf waterfront office building was completed in 2002 at 550 Terry Francois Blvd. The 12-year lease to Gap commences next year and runs through Oct. 2017, with fixed rental growth of 9.7% in 2007 and 8.8% in 2012.

The property is expected to deliver an initial yield of 6.8% (pre costs). The purchase is being funded with debt and the institutional placement of approximately 35 million common units, which was completed yesterday for total proceeds of $54 million. The offering was underwritten by Deutsche Bank AG.

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