By Jon Peterson
New York City-based Bridgeton Holdings has placed on the market for sale the 56,448 square foot mixed-use property located at 555 De Haro Street in San Francisco. The pricing guidance on the sale is approximately $50 million, or roughly $885 per square foot, according to sources familiar with the property’s listing details.
The seller has chosen the San Francisco office of CBRE to be the listing agent for the sale. Those involved working on the transaction are Kyle Kovac and Mike Taquino, both executive vice presidents. CBRE declined to comment when contact for this story.
Bridgeton has been the owner of the property for around four years. It had paid $27 million for the asset, when it purchased the property in October 2017, according to public records. The existing property as it stands now is a mixture of lab, office, creative production, distribution and repair space. The asset was first developed in 1917 and was renovated in 2020. It is a four-story structure, which also includes 47 parking stalls.
The expectation in the market is that the property will likely attract core plus capital in the sale of the asset. The property is now 91 percent leased to seven tenants; three major tenants are Fyusion, Schawk and Generate Capital. Over 85 percent of the revenue in the property is from credit tenants. The average weighted lease term with the current tenants is 3.4 years. There is a marked-to-market opportunity, since the in-place rents are roughly 25 percent below market levels.
555 De Haro could also give new ownership a chance to expand the property. An additional 37,000 square feet can be added to the property for either lab or life science space. This could be constructed on the northern portion of the property’s parking lot. For this to happen, the new ownership would have to go through an entitlement process, which can be laborious in San Francisco. However, the city’s Planning Department recently issued a letter of determination that expands the permitted uses in PDR zoning districts to include lab/life science, which would enable new owners to expedite the approvals, if this route is chosen.
The property is located in the intersection of Showplace Square, SoMa and Mission Bay, which is one of the top performing life science/lab clusters in the region and on the West Coast. There is virtually no available space for lab users to lease in Mission Bay, which creates a natural progression westward and causing a lab cluster to form toward Showplace Square.
The existing asset is roughly one mile from the Warriors’ Chase Center and Giants’ Oracle Park. This brings numerous retail amenities and entertainment options, as well as transportation connectivity to the immediate area.