Rogoff shared some added insights about the investment upside and value-add aspects of this transaction in this exclusive.

GlobeSt.com: What makes a parking garage a unique investment choice?

Rogoff: Garages are unique investments for a few reasons: First, most structured garages tend to be well-located and in urban areas. They make for terrific covered land plays. In the event the parking market changes, the garage still maintains its terrific location and can likely be repositioned into another use down the road. In the case of 350 Beach Street, hotel developers were very interested in acquiring the asset because it is located in the most tourist-trafficked area of the city, Fisherman's Wharf. Second, there are many inefficiencies in the operations of a garage and more companies are starting to focus on this. As garages are better operated thanks to technology, more revenue can be generated and less expenses are incurred. Thirdly, garages as an investment class are rapidly become more institutionalized. As more capital flows into the space, pricing for each asset increases.

GlobeSt.com: What are the value-add opportunities inherent in this transaction?

Rogoff: 350 Beach Street is currently on a master lease with a local parking operator. This means that current ownership receives a check once a month from the operator and does not have to do anything. It is simply a lease covering the garage. 350 Beach Street Garage is currently master leased through mid- 2019 with zero extension options remaining. This master lease is currently approximately 50% below market. This near-term expiration provides investors the option to renegotiate the agreement with the current operator (or another operator) at market-rate terms, thereby creating a bondable income stream. Alternatively, an investor can choose to let the agreement expire and unlock the asset's true cash flow potential by self-operating the garage.

GlobeSt.com: What do you see as potential for investment in this area of San Francisco?

Rogoff: The potential for investment in this product is massive. This is the seventh parking asset my partner and I have sold in the past 24 months and there are more players showing up on every deal to invest in the parking space.

SAN FRANCISCO—350 Beach Street Garage was put on the market by its private owner earlier this year for the first time in 35 years. And, the urban structured parking garage in Fisherman's Wharf was just sold to Stockdale Capital Partners for an undisclosed price.

The garage comprises six levels and accommodates 241 stalls with additional ground-floor retail occupied by Enterprise Rent-A-Car and El Farolito Taqueria. The property's Fisherman's Wharf location makes it a unique potential long-term redevelopment opportunity.

NKF Capital Markets vice chairman Nicholas Bicardo, director Brandon Rogoff and associate director Bryce Holman, represented the seller in the transaction.

“350 Beach Street Garage maintains tremendous upside once the new owner takes back operations of the garage from the current operator,” said Rogoff. “The garage also represents an exceptional covered land play where the existing income and location are rock solid, and the current zoning provides for several different exit strategies.”

Rogoff shared some added insights about the investment upside and value-add aspects of this transaction in this exclusive.

GlobeSt.com: What makes a parking garage a unique investment choice?

Rogoff: Garages are unique investments for a few reasons: First, most structured garages tend to be well-located and in urban areas. They make for terrific covered land plays. In the event the parking market changes, the garage still maintains its terrific location and can likely be repositioned into another use down the road. In the case of 350 Beach Street, hotel developers were very interested in acquiring the asset because it is located in the most tourist-trafficked area of the city, Fisherman's Wharf. Second, there are many inefficiencies in the operations of a garage and more companies are starting to focus on this. As garages are better operated thanks to technology, more revenue can be generated and less expenses are incurred. Thirdly, garages as an investment class are rapidly become more institutionalized. As more capital flows into the space, pricing for each asset increases.

GlobeSt.com: What are the value-add opportunities inherent in this transaction?

Rogoff: 350 Beach Street is currently on a master lease with a local parking operator. This means that current ownership receives a check once a month from the operator and does not have to do anything. It is simply a lease covering the garage. 350 Beach Street Garage is currently master leased through mid- 2019 with zero extension options remaining. This master lease is currently approximately 50% below market. This near-term expiration provides investors the option to renegotiate the agreement with the current operator (or another operator) at market-rate terms, thereby creating a bondable income stream. Alternatively, an investor can choose to let the agreement expire and unlock the asset's true cash flow potential by self-operating the garage.

GlobeSt.com: What do you see as potential for investment in this area of San Francisco?

Rogoff: The potential for investment in this product is massive. This is the seventh parking asset my partner and I have sold in the past 24 months and there are more players showing up on every deal to invest in the parking space.