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Rincon Center Brings Sellers $275M

SAN FRANCISCO-The mixed-use property here includes 757,000 sf of office space and 320 apartment units. The IRR to investors was in excess of 20%.

By Brian K. Miller | Updated on July 18, 2006

SAN FRANCISCO-Rincon Center has sold for $275 million. The mixed-use property here includes 757,000 sf of office space in two buildings, 320 apartment units and 381 subterranean parking spaces. Rincon I is a five-story renovated historic U. S. Post Office facility. Rincon II comprises two 22-story towers built in the late 1980′s.

The seller is a joint venture of Blackstone Real Estate Partners II and Glenborough Realty Trust, a San Mateo-based REIT. Blackstone owned a 90% stake in the property and Glenborough the remainder. The buyer is believed to be Beacon Capital, a Boston based investment advisor but that could not immediately be confirmed Tuesday morning because Glenborough CFO Brian Peay did not make himself available for comment, Beacon Capital senior managing director Jeremy Fletcher was on a plane and a Blackstone representative could not immediately respond.

Glenborough said in a prepared statement that its share of the gain from the June sale was approximately $9.5 million, which equates to an internal rate of return in excess of 20% to all investors. The sale was prompted by the renewal of one of the major office tenants and the potential to convert the multifamily units to condominiums, the company said.

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