115 Sansome Street in San Francisco on the Market, Could Fetch Over $700/SF

Vanbarton Group, San Francisco, Bay Area, JLL, Blue Bottle Coffee, The Treasury bar, The Shota, Sansome Street, New York City

San Francisco TA Associates Realty JLL Bay Area Realty Associates Fund SansomeBy Jon Peterson

Boston-based TA Associates Realty has placed up for sale the approximately 128,000 square foot 115 Sansome Street office building in San Francisco. The potential sales price could reach $700 per square foot or $89.6 million, according to sources that track the sale of office buildings in San Francisco.

The listing agent on the sale is the San Francisco office of JLL, represented by Michel Seifer, Rob Hielscher and Erik Hanson. JLL declined to comment when contacted for this story.

[contextly_sidebar id=”auCbsDI9X9tWXZcerX2e7OeA8has8s1n”]When the property sale closes, TA is looking to gain a strong return on its investment. The pension fund real estate manager had acquired the property in April of 2013 for $51.5 million or approximately $402 per square foot for one of its commingled funds, Realty Associates Fund X.

The seller has completed its overall business plan on the property and that is why it has decided to sell the property at this point in the market cycle, according to sources familiar with the property. When the seller had acquired the property it was known as a traditional historical office building in San Francisco. Since its acquisition, TA has made improvements to the property and turned 70 percent of the building into creative office space.

It had also made some changes to the ground floor retail part of the property. Cable Car Clothiers was taken out and was replaced by Blue Bottle Coffee and The Treasury, a financial district bar/restaurant.

The occupancy of the property has been improved significantly since the TA Associates has owned the asset. Occupancy stood in the low 80 percent range when the seller first acquired it. It now is 99 percent full. Many of the new leases signed in the property have been done so at rental rates approaching $70 per square foot.

There will be a possibility for the new owner of 115 Sansome to add some value to the property in the near future. Around 15 percent to 20 percent of the space will be coming up for renewal over the next few years. In addition to that, 30 percent of the space in the building that was not transitioned into creative space could be transformed to attract newer tenants.

The expectation is that the property will attract interest form a mixture of domestic and international capital sources that are looking for a core/core plus office building to own in San Francisco. Offers will be accepted by the seller starting sometime in July.

West Coast Commercial Real Estate News