SAN FRANCISCO—Airbnb's corporate headquarters, a 445,000-square-foot, class-A office building located at 888 Brannan St. in San Francisco's South of Market submarket has been acquired by TIAA-CREF, a financial services organization and manager of institutional tax-exempt real estate assets. In a joint venture with partner, Norges Bank Investment Management, manager of the Norwegian Government Pension Fund Global, Norges Bank has acquired a 49.9% stake while TIAA-CREF will own a 50.1% interest and manage the property on behalf of the partnership.
The five-story building was constructed in 1918 and was a former gift center and jewelry mart that underwent a $70 million renovation prior to becoming Airbnb's headquarters. The surrounding neighborhood and redeveloped office buildings have been heavily sought-after by technology and creative tenants due to the appeal of large floor plates ranging from 60,000 to 100,000 square feet and creative build-outs, as well as proximity to BART, Muni and Caltrain.
Rich Kimble, head of western region acquisitions for TIAA-CREF, tells GlobeSt.com: “We like this asset for a number of reasons including the fact that the previous owners did a great job with the new build-out–the high ceilings and light are a draw, and the style of the property appeals to creative tenants. The large floor plates are unique–properties like this are hard to find and new development of this format can't easily be built in San Francisco. We like the submarket and feel that it will only get stronger over time with new residential and retail being developed in the neighborhood.
The city has a high occupancy rate for office properties and spaces with large floor plates are especially difficult to find, says Kimble. “Office buildings in San Francisco with floor plates greater than 50,000 square feet are currently over 98% leased on average.”
“San Francisco is an exciting and dynamic market and this investment makes sense on a number of levels. This submarket is attractive to tenants looking for modern, redeveloped space at a competitive cost compared to new construction,” said Suzan Amato, managing director of managed accounts for TIAA-CREF. “The location offers easy access for walkers, bikers and public transportation riders alike, and is close to restaurants and amenities in the surrounding neighborhoods.“
As previously reported, activity in SoMa continues to be robust.
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Lisa Brown
Lisa Brown is an editor for the south and west regions of GlobeSt.com. She has 25-plus years of real estate experience, with a regional PR role at Grubb & Ellis and a national communications position at MMI. Brown also spent 10 years as executive director at NAIOP San Francisco Bay Area chapter, where she led the organization to achieving its first national award honors and recognition on Capitol Hill. She has written extensively on commercial real estate topics and edited numerous pieces on the subject.
