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Ashforth Pacific, GE Buy 405 Howard for $247M

SAN FRANCISCO-The partnership buys the 504,000-sf, 10-story building from Sterling American Property and Hines, which had raised occupancy to 98%.

By Brian K. Miller | Updated on August 01, 2007

SAN FRANCISCO-Foundry Square II, a the 504,000-sf, 10-story building at 405 Howard St. in San Francisco’s South Financial District has changed hands for $247 million or $490 per sf. A joint venture of Ashforth Pacific Properties and GE Asset Management acquired the asset as a long-term hold from a JV of Sterling American Property and Hines. The sale closed this week. Eastdil Secured had the disposition assignment.

The transaction follows a two-year repositioning program by the sellers that raised occupancy in the building to 98.5% from 71%. One of the tenants added to the building was Barclays Global Investments, which leases all of Foundry Square I. The anchor tenant is Orrick Herrington, a law firm that occupies nearly half of the building for its global headquarters on a lease that was signed near the bottom of the market and does not expire until 2019. Other major tenants include Moody’s and Continental Casualty.

The Sterling-Hines JV acquired the building as part of an unstable four building, 1.7 million sf from Equity Office Properties in 2005 for approximately $397 million. The other properties are 301 Howard St. and 120 Montgomery, also in San Francisco, Parkside Towers in Foster City, CA and San Rafael Corporate Center in San Rafael, CA. Earlier this year the JV sold 301 Howard to Archon for $129 million. The other buildings remain in Sterling’s portfolio but probably not for much longer given the company’s value-add strategy.

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