Alaska Permanent Fund Puts 100 Pine Street in San Francisco Up for Sale

JLL, Alaska Permanent Fund Corporation, LaSalle Investment Management, The Rockpoint Group, San Francisco, Bay Area,

Alaska Permanent Fund, San Francisco, Bay Area, LaSalle Investment Management, JLL

By Jon Peterson

The Alaska Permanent Fund Corporation has put the 402,534 square foot 100 Pine Street office building on the market for sale. The potential price point could be someone in the range of $680 per square foot, according to sources aware of the property, which could bring the sale figure in the range of $275 million.

The pension fund declined to comment other than confirm that the property is up for sale and would not give a current value of the property when contacted for this story. This investor owns the asset through a separate account with Chicago-based LaSalle Investment Management. This ownership had acquired the property for $149 million or more than $370 per square foot in 2005.

The listing agent on the sale is JLL through its San Francisco Bay Area Capital Markets Group. This company also declined to comment when contacted for this story.

The office building is now 95 percent leased. The major tenants in the property include Republic Indemnity, Simpson Gumpertz & Heger, Artisan Partners, Bank of NY Mellon and Lifelock. These existing tenants offer protected in-place cash flow. There will be a chance to add some additional value in the near term. 52 percent of the property’s rentable area is expiring over the next four years. The current rents in the property now are 23.4 percent below the current average market rate.

One of the unique parts of the property is that its 62.7 percent is leased to finance, insurance and real estate tenants. This sector of the industry has made up less of the expansion of the San Francisco office market in the recent run-up since the Great Recession. Technology tenants, on the other hand, have led most the growth in San Francisco. This property has less than 10 percent of its space taken by technology tenants.

100 Pine Street was first constructed in 1972 and was the headquarters for Continental Insurance Company. The current ownership of the property has invested more than $12.5 million in property upgrades since 2006. This work included most of the building’s common areas, elevator lobbies and restrooms.

The office building does have a three-level subterranean parking structure that can hold 150 cars. This is a valuable tenant and neighborhood amenity, since many surface parking facilities in San Francisco have been replaced by office and apartment developments.

The location of 100 Pine puts it in a good spot for companies relying on mass transportation. It is a block away from the Embarcadero BART station and two blocks from the future Transbay Transit Center.

CORRECTION: The previous version of this article stated the intended sale price was in the range exceeding $300 million. The figure of $275 million is a number that is more realistic, based on feedback from people familar with the offering details.

West Coast Commercial Real Estate News