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AAA Sells 600,000-SF HQ Complex for $120M

SAN FRANCISCO-Buchanan Street Partners, investing on behalf of the California Public Employees Retirement System, puts up nearly $50 million of equity for the acquisition.

By Brian K. Miller | Updated on January 27, 2008

SAN FRANCISCO-The California State Automobile Association has closed on the sale of its 600,000-sf headquarters complex one block from City Hall for $120 million, according to local real estate sources. Buchanan Street Partners, investing on behalf of the California Public Employees Retirement System, says it put up nearly $50 million of equity for the acquisition in a joint venture that is planning to reposition the properties through “enhancements to the common areas and lobbies, asbestos abatement and seismic renovations.” Its joint venture partners are locally based Patson Cos., which last year acquired the historic Cannery at Fisherman’s Wharf, and Vornado Realty Trust.

The centerpiece of the acquisition, the 28-story 375,000-sf building at 100 Van Ness Ave. which boasts views of all four bridges from the upper floors, represents the only high-rise multi-tenant office property in the submarket. The rest of the portfolio, built in the 1950s, consists of two connected seven-story buildings and one eight-story building located at 150 Van Ness Ave. and 150 Hayes St., and parking for 248 vehicles.

The complex came to market in mid-2007, when the CSAA, also known as AAA of California, announced it would move to a new 250,000-sf building in Walnut Creek that would be built to suit the 1,000-person organization by Equity Office Properties. The proceeds from the sale of its current headquarters complex should cover in large part the cost of its new digs, which is expected to cost approximately $500 per sf to develop. CSAA’s long-term lease deal for the building includes a fixed-price purchase option.

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