SAN FRANCISCO-GlobeSt.com has exclusively learned that 255 California St., an office building at the corner of California and Battery streets in downtown San Francisco has changed hands. While sources close to the deal could not divulge pricing information, an unidentified source not involved in the deal tells us that a fund advised by Prudential Real Estate Investors paid $76 million for the 183,000-square-foot asset.
The seller, Highridge Partners and Montgomery Advisors, sold the class A mid-rise office at a time when the level of interest was high, according to Sean Sullivan, and EVP with CBRE, who represented the seller along with vice chairman Russell Ingrum, senior vice president Ken White, vice chairman Kevin Shannon, and director Tyler Meyerdirk.
“We weren't surprised to see a high level of investor interest for 255 California Street,” says Sullivan. “Highridge Partners and Montgomery Advisors did a great job of renovating and repositioning the asset, and in subsequently increasing occupancy to 82%, really validating the overall strategy they had envisioned.”
Fortunately, he continues, “there is still plenty of room for growth due to the remaining lease-up and lease rollover opportunity within the country's hottest leasing market.” According to CBRE research, the San Francisco office market has experienced nearly 3.2 million square feet of positive net absorption in the last 18 months. “Class A CBD rents have increased 36.7% since the beginning of 2011, and are forecast to grow another 33% by 2017.”
According to Sullivan, “The market for low and mid-rise space has been the beneficiary of the strongest tenant demand and rental rate growth. This has been led by the surging requirements of technology tenants who prefer efficient space close to public transit.”
255 California St. was built in 1959, designed by Skidmore, Owings and Merrill, and significantly renovated in 2011 and 2012. Approximately $7.9 million was invested in a redesigned entryway and main building lobby, seismic retrofit, renovated 2nd level garden terrace and other common area upgrades.
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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.
