Prime Asset in Gateway Market is Draw for Buyer

Mass transit is convenient to the building.

SAN FRANCISCO—The exterior of the 10-story 550 Kearny features a white facade with sharply contrasting dark-tinted windows. The lower floor features floor-to-ceiling, dark-tinted glass which complements the sharp lines of this classic office building. The LEED-certified building was constructed in 1957 and has the benefit of being recently renovated. The Financial District structure features 194,000 square feet of space and is 95% leased. Due to the factors adding up in the plus column for the building’s profile, Madison International Realty has acquired an ownership stake in 550 Kearny at an implied purchase price of $103.7 million.  Owner Brickman Real Estate retains a minority equity interest. “550 Kearny presented an extremely attractive investment opportunity in San Francisco’s thriving office market. This transaction involved a recapitalization that fit perfectly with Madison’s investment strategy,” said Ronald M. Dickerman , founder and president of Madison International Realty. “Our equity investment allowed Brickman to return capital to its investors while retaining an ownership interest in the property. This was an important objective given the property’s below-market leases and opportunity to mark in place rents to market over the near term.” The building features 9,700 square feet of ground-floor retail space, including an on-site building cafe which offers convenience to tenants and employees for midday lunch or breaks. Tenants have access to a new, 40-plus person conference center ideal for large meetings or other tenant needs and a common-area kitchen. Mass transit is convenient to the building, offering easy access for commuters. In addition, the building offers a valet, 130-stall parking garage for tenants and visitors, as well as bike storage. Dickerman tells GlobeSt.com: “We believe in San Francisco because we are attracted to prime assets in gateway markets and San Francisco is certainly that.” Madison International Realty is a real estate private equity firm specializing in acquiring partial ownership, joint venture, private REIT and listed shares in class-A properties and portfolios in primary markets in the US, UK and Western Europe. The firm also provides joint venture equity to owners, sponsors and investors who are seeking to monetize existing equity positions, restructure balance sheets, or to replace existing capital partners.