A San Francisco Bay Area-based family trust has chosen to place on the market for sale the high-street retail property in San Francisco’s Union Square retail market located at 166 Grant Avenue. The pricing guidance on the sale is $35 million, or roughly $3,112 per square foot, according to sources familiar with the property.
The seller has chosen the San Francisco office of CBRE Capital Markets to be the listing agent on the sale. Those working on the transaction include Kyle Kovac and Michael Taquino, both executive vice presidents at the firm, and Giancarlo Sangiacomo, who is a vice president. CBRE declined to comment when contacted for this story.
The seller has been the owner of the property since 2005, and the group will likely realize a significant gain on the sale of the property if it reaches the pricing guidance. The seller had acquired the property for $10.5 million in 2005, according to public records.
The property is an 11,246 square-foot asset, and it is fully leased to the Italian fashion house of Giorgio Armani. The tenant is paying its rent now and has a lease that goes through 2030. The lease also has 3.5 percent annual escalations, which puts the rental rate above market rates at the moment. The property has three stories and includes a mezzanine and a lower level. It was first constructed in 1908 and was last renovated in 2016.
The projection is that the types of buyers that would be interested in the property could include institutions, commingled funds that only invest in retail properties as well as high-net-worth individuals who are looking for properties with strong and durable income.
The sale of 166 Grant represents a unique sale for the San Francisco retail market. The 100 block of Grant Avenue encompasses just seven commercial buildings, all of which have been owned for an average of more than 25 years and are fully occupied with luxury brands. Some of the tenants in the building include Cartier, Fendi, Dior, Hermes and Valentino.
166 Grant is considered to be part the Union Square retail submarket in San Francisco, the pre-eminent retail market in the city. Through the fourth quarter of 2021, this region had the third-highest retail rent per square foot at $515 for luxury districts in the United States. It trailed only the Upper 5th Avenue in New York City and Rodeo Drive in Beverly Hills.