Blackstone to Buy Embarcadero Square in San Francisco for $245MM

Blackstone, Embarcadero Square, San Francisco, JLL, Gaw Capital, Real Capital Analytics, Esurance, CBF Electric & Data, Blackstone Property Partners
Image courtesy of Gaw Capital Partners

By Jon Peterson

New York City-based Blackstone is under contract to acquire the 293,877 square foot Embarcadero Square office complex in San Francisco for $245 million, as stated in a marketing report by JLL. At this pricing, the per square foot amount for the structure would come to over $833 per square foot.

The seller of the property is Gaw Capital, a private equity real estate fund management and separate account investment company based in Hong Kong. Gaw responded to a request for comment via e-mail but declined to comment on the transaction and details around the sale.

This sale has not closed, yet, and the planned trade is considered to be an off-market transaction with no listing agent involved in the sale.

Blackstone did not respond to an email for a comment for this story.

Gaw Capital has been the owner of the property for almost four years. It had paid $176 million, or $631 per square foot ,for the property in December 2014, as was reported by Real Capital Analytics.

The asset now is considered to be a core plus asset. The complex has a current occupancy somewhere in the range of 90 percent. Among the tenants in the property are Esurance and CBF Electric & Data. The property was first developed in 1982.

Blackstone does have an entity focused on the core plus sector. It’s called Blackstone Property Partners. The open-ended fund has a current gross value of $17 billion, as stated in a board meeting document from the South Carolina Retirement System. The performance of this fund to date since its inception in 2015 has been a gross time-weighted return of 13.7 percent.

Embarcadero Square is part of the Class A office development that is located within the North Financial District sub-market in San Francisco at 650 Davis Street. According to the third quarter 2018 data from JLL, this specific Class A submarket of San Francisco has a total of 21.5 million square feet of commercial office space with a total vacancy of 9.2 percent.

Image courtesy of Gaw Capital Partners
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