Beacon Capital Partners Likely Buyer of Zynga Building in San Francisco for Around $700MM

By Jon Peterson

Boston-based Beacon Capital Partners is the likely buyer of the 670,000 square foot Zynga building in San Francisco for around $700 million or $1,000 per square foot, according to multiple sources that are familiar with the on-going sale of the property.

The transaction has not closed yet, but Beacon seems to have won the top spot for the purchase of the property. The planned sale of the property would be a significant gain for the seller, which would be unloading the asset for roughly three times the amount of money it spent on it almost seven years ago. Zynga had acquired the property for $228 million in 2012, as stated in public records. The seller at the time was San Francisco-based TMG Partners.

The current sale of the building located at 650 Townsend Street would be the second time that Zynga has tried to sell its property. The first time the company indicated that it was exploring a sale was in 2016, but the seller was not able to strike a deal with an investor at that time.

While the building is the the company’s headquarters, Zynga is not the only tenant in the property. Airbnb has signed a lease to occupy 287,000 square feet of the building for the next 9 years. It will move into this space sometime later this year. Another big tenant in the property is iRhythm, a digital healthcare company. It signed a lease for 120,000 square feet in October of 2018.

The possible sale of the Zynga building could end up being the first of two $700 million office deals in San Francisco. The other is the sale of Levi’s Plaza, which is on the market and is likely to attract similar pricing. According to sources familiar with this sale, there has been a total of 14 offers made for the property. This potential sale is early on in its process compared to the Zynga transaction, and no lead buyer has been identified for this asset at this time.

The price point on a per square foot basis for Levi’s Plaza is projected to be around $800 per square foot. This pricing for the property is lower than the Zynga building, since it is not clear how much space Levi Strauss will occupy in the future. The tenant has let it be known that it is out in the market looking at alternative locations that it may occupy in the future.

The listing agent on Levi’s Plaza is the San Francisco office of Eastdil Secured. This asset is located at 1155 Battery Street.

West Coast Commercial Real Estate News