November 22nd, 2008
235 Pine Street sells for $78 Million
In the middle of what continues to be a declining economic period, a building has sold on Pine Street.
235 Pine is a beautiful piece of property with a solid tenant base and it lies essentially three blocks up from Market St on the West side, and two blocks up from Market St on the South side. As has been reported by the San Francisco Business Times (see below for article), this sale represents the only closed transaction for a Class “A” property that was brought to the market during 2008.
What this fact means to the marketplace depends largely on who you ask. Some say buildings in the City have not sold recently because of a differing point of view on value between buyers and sellers. Some say the lack of sales is due to the increasing difficulty of getting purchases financed. What certainly is agreed upon is complete uncertainty. It is a changing market on the leasing side, the sales side, the financing side, and the construction side. It is my prediction that until some of the bigger picture items work themselves out such as bailouts and inagurations, we will continue to see people decide not to decide until the outlook is more clear.
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Sale of 235 Pine makes a big splash in quiet waters
A year ago, the sale of 235 Pine St. for about $78 million would have barely registered as a blip in San Francisco commercial real estate investment circles.
Today it is not only news. it’s the only game in town.
The Realty Associates Fund VIII LP, managed by TA Associates Realty of Boston, bought the 207,000-square-foot office building for approximately $380 a square foot. The seller was Alecta Real Estate. Jones Lang LaSalle will be managing the building for the new owners.
The deal — some $100 a square foot less than the property would have commanded a year ago — represents the first sale of a major Class A office building in downtown San Francisco that came to market in 2008. The few structures that have sold this year — 199 Fremont St., 150 Spear St., 55 Francisco St. and Hawthorne Place — all came on the market in late 2007.
Meanwhile, owners continue to yank buildings off the trading block due to tepid buyer interest. This group includes 88 Kearny St., 123 Mission St., 601 California St., 1 Montgomery St., 50 Beale St., 255 California St., 555-575 Market St. and 201 Mission St. Brokers say they don’t expect any more large Class A sales until 2009.
Written by J.K. Dinneen & Blanca Torres of the San Francisco Business Times
San Francisco Business Times Article Here
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If there is anything I can do to help you as a Tenant Representative in the commercial real estate world, please do not hesitate to get in touch with me.
Thanks for visiting,
Tom Poser, Jones Lang LaSalle, San Francisco
www.sanfranciscotenantrep.com
