By Jon Peterson
Boston-based Beacon Capital Partners has put under contract the acquisition of 201 California Street office building in San Francisco for approximately $179 million or $725 per square foot, according to multiple sources familiar with the transaction.
The deal has not closed, yet, although the anticipated closing of the transaction is expected to be sometime in December.
The seller of the property is Hartford, Conn.-based Barings Real Estate Advisers. The listing agent on the sale is the San Francisco office of Eastdil Secured. This firm declined to comment when contacted for this story.
201 California is considered to be a value-add investment opportunity for the new owner, as stated by sources familiar with the property. The property, which has a current occupancy of around 90 percent, is expected to roll around two-thirds of the existing tenants over the next two years. This will allow the Beacon to add significant value to the property by bringing rents up to a market level.
Beacon will be buying the property into a commingled fund, Beacon Capital Strategic Partners VII, according to sources familiar with the transaction.
Barings had acquired 201 California in 2014 when the company was known as Cornerstone Real Estate Advisers. It had paid around $133 million or $549 per square foot for the asset at that time.
Beacon Capital is known as a national investor in office buildings primarily focused on assets to which it can add value. It has a regional office in San Francisco located at One Sansome Street. The real estate manager has been an investor in the San Francisco Bay Area for some time and has invested in properties in San Francisco, Santa Clara and San Mateo.
Beacon Capital’s investment strategy is focused on properties in the major markets around the country. Other areas of focus for the company outside of the Bay Area include Seattle, Boston, New York, Chicago, Denver, Los Angeles, Portland and Washington, D.C.