AT&T Park Building Draws Big Institutional Buyer

By Sharon Simonson

Glendale-based American Realty Advisors has paid $93.75 million for 153 Townsend St. in San Francisco, gaining 168,000 square feet of offices, ground-floor retail space and a five-story parking garage.

The nine-story office building built in 2002 sits immediately across King Street from AT&T Park in the heart of the South of Market district. It is also immediately north of Mission Bay, the rapidly evolving life sciences and technology industry cluster surrounding the new UCSF Medical Center and campus.

“As the economy continues to recover and exhibit signs of increasing stability, American believes that it is prudent to focus on high-quality real estate investments in markets with strong globally-competitive industries,” Stanley L. Iezman, American Realty Advisors’ chairman and chief executive, said in a prepared statement.

“As technology markets like San Francisco continue to enjoy large increases in occupancy and rents, the acquisition of 153 Townsend represents an outstanding opportunity to own a premier asset, with secure long-term cash flows, in a dynamic and growing market,” he said.

The building, also known by its 160 King St. address, was 98 percent leased at sale.

American Realty Advisors provides commercial real estate investment management services for institutional investors.

The seller was San Diego-based real estate investment trust American Assets Trust Inc., which intended to use the sale proceeds to finance the acquisition of City Center Bellevue, an office building situated in the financial district of Bellevue, Wash., according to a news release.

American Assets Trust reported annualized base rent of $5.8 million from 153 Townsend at the end of the third quarter, according to records filed with the U.S. Securities & Exchange Commission. That translates to annualized base rent per leased square foot of $35.33.

The largest tenant in the building is Ancestry.com, which is leasing not quite 65,000 square feet and paying annual base rent of $2.7 million. Its leases expire in May 2015 and May 2019.

American Assets Trust continues to own The Landmark at One Market, also in San Francisco’s South of Market district. The 422,000-square-foot building produces $18.97 million in annualized base rent, or $44.95 on a per-leased-square-foot basis. The largest tenant is Salesforce.com Inc.

“What institutional capital is realizing is that the south side of Market Street all of the way to the ballpark is here to stay, and it’s not just a fad,” said Chris Roeder, an international director for Jones Lang LaSalle in San Francisco. American Realty Advisors has retained Roeder and Jones Lang as the building’s leasing agent.

In addition, the large open floor plates accented with lots of natural light that characterize the building and other popular SoMa offerings are no longer of interest solely to technology tenants. “All types of industries are appreciating some of the new open office spaces,” he said.

American Realty has more than $4.5 billion in assets under management.

West Coast Commercial Real Estate News