Beacon Capital Places 201 California in San Francisco on the Market, Pricing Could Reach $240MM

By Jon Peterson

Boston-based Beacon Capital Partners has put up for sale the 17-story office building in San Francisco located at 201 California Street. The possible sales price could reach $240 million, or roughly $970 per square foot, according to multiple sources that track the sale of major office buildings in San Francisco.

Beacon did not respond in time to inquiries for this story. The real estate investment firm has chosen the San Francisco office of Eastdil Secured to be the listing agent.

Should the sale of the roughly 247,000 square foot building go through, it would represent the third time in the last five years that the property has been sold. Beacon Capital, along with the California State Teachers Retirement System (CalSTRS), had paid $179 million for the property in December of 2017. This ownership had acquired the property from Hartford, Conn.-based Barings Real Estate Advisers, which had paid $133 million for the building in 2014.

The size of this building sale should be a welcome sight to many institutional capital sources. According to industry analysts, there is a lack of high-quality large assets on the market in San Francisco. The city’s office market remains high on the shopping list for many institutional capital sources, but they are having a hard time finding assets to buy with so few properties up for sale.

201 California should now be considered a core asset. When Beacon acquired the asset in 2017, around two-thirds of the existing tenants in the property were coming up for renewal over the following two years. The current occupancy of the property is 97 percent, and some of the tenants in the building now include Dow Jones, law firm Cooper White & Cooper and HDR Architecture.

Beacon has had a very active investment year in 2019 with a number of San Francisco office building purchases. This included two deals in May; one was the $600 million transaction and sale/leaseback with Zynga for its corporate headquarters in the property at 650 Townsend. The other was the $191.5 million acquisition of 655 Montgomery that the manager also acquired with CalSTRS.

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