New Urban CEO Tom Owens tells GlobeSt.com that the buildings, which are 100% leased, mark his entry into both the Union Square and Mid-Market submarkets. He describes the acquisition as a long-term core-plus investment, saying the buildings have a steady rent roll, won't require anything but cosmetic upgrades and will be held for at least seven years.
"We are going to do some renovations but nothing extensive," he says. "The lobby of 166 Geary will get a new treatment [first], and eventually 944 Market as well."
The building at 166 Geary has quite a bit of retail, housing traditional retail shops on the first floor and a number of salons and dentists on the upper floors. The connected two-story building at 171 Maiden houses a café and a perfume and candle store at street level and the Yosh salon on the second floor. The Mid-Market building, 944 Market, has a high-end athletic shoe store and a small restaurant at street level and office space above.
All three assets were acquired from Leslie Tang Schilling, owner of Union Square Investment Co. Schilling had owned the properties for 25 years. Grubb & Ellis represented Schilling in the transaction. Owens represented himself.
The acquisition takes New Urban's San Francisco portfolio to seven buildings. In May 2007, also from Schilling, New Urban acquired 625 Market St., a 71,345-sf office building at the corner of Market and New Montgomery streets. The 14-story building was 93% leased at the time, anchored by Bank of America. The purchase price was $25 million.
New Urban is in the process of converting one of its earlier purchases, 74 Montgomery, from 121,000 sf of office to 107 condominiums. Unit sales began closing in January.
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