604 Mission in San Francisco Could Attract $30MM or $1,100/SQFT

By Jon Peterson

Miami, Fla-based Market Street Real Estate Partners has placed on the market for sale the 26,796 square-foot 604 Mission Street office building in San Francisco. The pricing for this asset could reach $30 million or $1,100 per square foot, according to sources that are familiar with the property and aware that the asset is now up for sale.

The building is also known as the Atlas Building, and it was constructed in 1905.

The seller has selected the San Francisco office of HFF to be the listing agent on the sale. HFF declined to comment when contacted for this story.

This property should attract a core buyer at a low cap rate. The office building has a number of smaller tenants that occupy 100 percent of the building. Most of the rents in the property are a market level rents, leaving the new property owner very little room to add value in the future to the building. However, the average lease term on the tenants in the building at this point in time is three years.

Market Street has completed all of the improvements that it planned to do for 604 Mission, which according to a listing on Loopnet came in at $3.95 million, or $147 per square foot. When the company acquired the property in 2015, it was 66 percent occupied and had average in-place rents that were 58 percent below market, as stated on the owner’s web site. The property underwent a comprehensive repositioning at the time, including modernizing common areas, tenant spaces and the elevator. In June of 2017, the property was refinanced with an $18.75 million securitized loan originated by Goldman Sachs.

The asset is now considered to be a fully creative office property. The building has a total 10 stories with the average floor plate in the asset around 2,700 square feet. This office building is the last property that the seller currently owns in the San Francisco market.

One of the companies based in the building is Caterpillar Ventures, an investment arm of the Peoria, IL-based industrial machine manufacturer Caterpillar. Others include The Bancorp Bank, Shuddle and Eniac Ventures, according to Loopnet.

604 Mission is located very close to mass transportation that is an added benefit to any of the tenants in the property. It’s within walking distance of the Metro Montgomery BART station in downtown San Francisco and in close proximity to the Transbay Terminal.

West Coast Commercial Real Estate News