SAN FRANCISCO-Locally based New Urban Properties LLC has acquired the headquarters of the Patelco Credit Union. Patelco had previously revealed plans to move its headquarters from San Francisco to Livermore, CA.
Patrick Hubbard and Robert Dumas of Sansome Street Advisors represented New Urban Properties. Hubbard tells GlobeSt.com that the purchase price was $10.6 million. David Klein and Jennifer Essner of Cassidy Turley BT Commercial represented the seller.
The two buildings, 144-154 Second St. and 156-160 Second St., constitute more than 50,000 square feet in San Francisco’s South of Market District. “We are delighted to acquire two historic buildings in an enviable location,” says Tom Owens, chief executive officer of New Urban Properties.
“To accomplish this purchase, we started by presenting a competitive bid. However, most of all, we were able to work with Patelco, who wanted to retain possession until February 2011,” he adds. “This was a great example of how buyers and sellers must cooperate in this economy for mutual success,” he adds.
One of the Patelco buildings was completed in 1909 and previously occupied by the Zellerbach Paper Co.; the other was constructed five years later, and went through a two-story addition in the 1980s. Both will be substantially vacant when Patelco completes its move at the end of Feb. 2011.
Owens points out that the buildings would be marketed to single users as well as smaller tenants, and primarily to technology companies, which have dominated the office landscape along SoMa’s active Second Street corridor. “There’s a caravan of techies walking down 2nd St. each weekday,” says Owens. “And the location of these buildings will get even more sought after once the Transbay terminal rises.”
The buildings are adjacent to the west end of the new $4.2 billion Transbay Transit Center, which broke ground last August with completion in 2017. In the meantime, Owens’ team will make significant improvements and help bring the historic character back to the buildings.
“We’ll make many updates to the properties geared toward the tech market,” says Owens. “They don’t want their father’s office building—they’re seeking open floor plans and a brick and timber, loft look—everything these buildings will offer and then some.”
For New Urban Properties, the deal represents a return to an investment market the company was an active player in during the last economic cycle. Between March 2006 and January 2008, New Urban Properties bought nine “historic” class-B buildings, all originally built between 1907 and 1923, including 166 Geary St., 171 Maiden Ln., 944 Market St., 625 Market St. and 580 Market St. The company also accomplished the successful office-to-residential conversion of 74 New Montgomery St., the historic Call Building (1914), redubbed “The Montgomery,” which sold out its 107 units in 2009. From 1998 to 2007 the company invested more than $450 million in San Francisco and Silicon Valley.
Owens said New Urban Properties has held fast to its formula and spent the past three years focusing on properties it holds. The company’s portfolio is 95% leased.
“The market is on fire, especially technology, which goes for about $5 more per square foot,” explains Owens. “We’ve been disciplined and are well positioned to tackle this market, with this acquisition at the forefront.”
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Natalie Dolce
Natalie Dolce, editor-in-chief of GlobeSt.com and GlobeSt. Real Estate Forum, is responsible for working with editorial staff, freelancers and senior management to help plan the overarching vision that encompasses GlobeSt.com, including short-term and long-term goals for the website, how content integrates through the company’s other product lines and the overall quality of content. Previously she served as national executive editor and editor of the West Coast region for GlobeSt.com and Real Estate Forum, and was responsible for coverage of news and information pertaining to that vital real estate region. Prior to moving out to the Southern California office, she was Northeast bureau chief, covering New York City for GlobeSt.com. Her background includes a stint at InStyle Magazine, and as managing editor with New York Press, an alternative weekly New York City paper. In her career, she has also covered a variety of beats for M magazine, Arthur Frommer's Budget Travel, FashionLedge.com, and Co-Ed magazine. Dolce has also freelanced for a number of publications, including MSNBC.com and Museums New York magazine.
