By Jon Peterson
The Washington, D.C.-based ASB Real Estate Investments continues to buy significant office building assets in urban markets. The latest example of this is its $92.6 million or $668 per square foot acquisition of the 138,430 square foot 444 De Haro Street office building in San Francisco located in the Potrero Hill sub-market.
The real estate investment advisor is a big believer in buying and owning urban assets in major markets across the country. “Our opinion is that urban real estate will hold its value longer than will real estate in other types of locations,” said David Quigley, chief investment officer for ASB Real Estate.
The property was acquired from New York City-based Ares Management. The real estate investment manager has awarded the listing of the sale to Bob Gilley, an executive vice president with the San Francisco office of DTZ, formerly known as Cassidy Turley Real Estate Services.
The property has had some strong leasing success over the past couple of years, although it had been vacant in that time period and is achieving occupancy at 96 percent today. This current occupancy means that the leases in the property are not all that far off today’s market rents.
444 De Haro was first built in 1927 and has been recently renovated. The existing tenants in the property include Invuity and First Look Media, according to sources familiar with the property.
ASB Real Estate paid all cash for the property. This is a structure that the real estate manager uses in many of its transactions. The company considers this purchase to be a core asset, given the occupancy and the rental rate situation in the complex.
AMB placed this acquisition into its core open-ended commingled fund, The ASB Allegiance Real Estate Fund. This commingled fund, which is always open to accept new capital commitments, has a portfolio valued at $4 billion, and approximately 12.6 percent of the fund is presently invested in the Bay Area (including Oakland and San Jose), as of Dec. 31, 2014.
ASB would like to locate additional investment opportunities in the San Francisco Bay Area. “Our belief of buying urban assets, makes us mostly looking to acquire office, retail and apartment properties. The markets in the region we have been looking at are San Francisco, Oakland and in San Jose for data centers,” said Quigley.