300 Grant, A Mixed-Use Asset with Development Opportunity in San Francisco Goes on the Market

San Francisco, Bay Area, 300 Grant, North Financial District, Chinatown’s Dragon Gate, Union Square,
Image courtesy of HFF
San Francisco, Bay Area, 300 Grant, North Financial District, Chinatown’s Dragon Gate, Union Square,
Image courtesy of HFF

A somewhat rare mixed-use redevelopment opportunity in San Francisco just blocks from the hyper active retail epicenter of Union Square and equally distant from the North Financial District of the city is on the market. 300 Grant Avenue is home to two buildings that presently add up to roughly 40,000 square feet. 290 Sutter, which takes up most of the space, is a 3-story structure with a basement that sits next to its smaller sister building, 272 Sutter, a single-story building, which today is home to one of Sugarfina’s retail stores. The two buildings were brought up for sale by the San Francisco office of HFF, which is promoting the site as a redevelopment opportunity that would see the two buildings demolished and replaced by a six-story, 62,000 square foot mixed use building that would house 32,000 square feet of retail on the first three floors and another roughly 30,000 square feet of office on the top three floors.

The seller of the property is an entity associated with Stamford, CT -based Core Plus Partners. According to public documents, the property was purchased in August of 2014 for $49,250,000, or just over $1,200 per square foot.

300 Grant is marketed as an irreplaceable, high-traffic location just one block from Chinatown’s Dragon Gate. The marketing document touts the scarcity of flagship retail space in the neighborhood and the appeal of Union Square as a major target location for online luxury brands to extend their presence into the brick and mortar world. It states that Union Square retail vacancy is at 2.9 percent, while the office vacancy is at 6.5 percent. The document also states that Union Square retail rent is at $685 on a NNN basis, with the most recent annual growth of 5.4 percent.

However, while the site is within a few of blocks of such high end retailers as Hermes, Mont Blanc and Salvatore Ferragamo, as well as two blocks away from Union Square itself, it does sit on an intersection that is occupied by lesser-value retailers. Its largest, and most prominent, neighbor across the street is Banana Republic. It is not clear if the rents from the marketing document would be achievable at this location or that the vacancy is as low.

Yet, the location’s appeal is undeniable, especially taking into consideration the proximity of the financial district; this building could offer an alternative setting for a company that wanted to be next to the business center, while also close to a uniquely San Francisco retail experience. Further, less than twenty percent of the Union Square submarket’s office and retail stock is larger than 50,000, and occupancy in those properties exceeds 96 percent, according to the document.

The location also has great access to transit, given its proximity to Union Square and Market Street. BART/MUNI stations are within blocks of the property, as are bus lines and the future Central Subway stop at Union Square.

West Coast Commercial Real Estate News