Built in 1916 and expanded in 1983, 55 Francisco is 95% leased to19 tenants, including the headquarters office of Jackson & Wallace, an 80-attorney law firm; Pacific Fertility Clinic; Fitzgerald Communications; and Video Arts. KBS did not name the seller or say for what fund or client it acquired the asset.
The seller is believed to be a joint venture of Rosenberg Co., the investment affiliate of ROK Properties, and Pacific Coast Capital Partners, a real estate investment firm. The duo acquired the asset and the parking garage in mid-2006 for $32 million or $222.70 per sf, according to an industry source. At the time, it was fully leased to 27 tenants, which included Jackson & Wallace and FitzGerald Communications.
A source with KBS could not be reached Tuesday for comment. KBS senior vice president Peter Mette says in a prepared statement that the property has the right attributes: a highly visible location, exceptional occupancy history, attractive parking ratio and extensive renovations, the most recent being an $8 million upgrade in 1999.
"Over the years, creative and service firms have appreciated the location proximate to the waterfront, the city's financial core, North Beach shops and restaurants, and the residential neighborhoods of Telegraph and Russian Hills," Mette says.
In April, Swig paid $27 million or $278 per sf for One Beach St., a 1920's era three-story, 97,000-sf warehouse turned office building across from Pier 39 in the North Waterfront submarket. The seller was the anchor tenant, Alliant University, which immediately flipped the asset to Swig after exercising a four-year-old option to acquire the building for $18 million. The deal included a long-term leaseback at a rate that stays around $20s per sf per year through 2014 and then jumps into the $30s if the university exercises the first of three five-year renewal options.
The building is 93% leased, with most tenants paying below-market rents. Swig's Ken Perry told GlobeSt.com at the time of the purchase that market rents for that type of product in the North Waterfront submarket were in the mid- to upper $30s per sf for the first two floors and higher for the top floor. Asking rents at 55 Francisco are $40- to $45 per sf per year, fully serviced.
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