SAN FRANCISCO – It was announced today that Bridgeton Holdings has sold the Pioneer Building for $34 million or $917 per foot. The building is a 37,104-square-foot office building in the heart of San Francisco’s Mission District and is 100 percent leased to Musk Industries, a venture backed by Elon Musk.
Bridgeton acquired the building in early 2014 for $17.5 million. At the time, it was leased to several growing technology tenants. Over the past three years, Bridgeton stabilized the property by negotiating lease expansions. When the in-place tenant required a significantly larger space, Bridgeton recognized the opportunity and negotiated an early termination to re-lease the building at market rent. The new lease with Musk Industries is for a 10-year term with space delivered in “as-is” condition.[contextly_sidebar id=”qRP20YFBMfFp1Vyw2N0hZG0T1ntJ0e1w”]“We bought the property because of its location in an extremely supply constrained submarket and because of its creative character, which is well suited for technology tenants. At the time we made our investment, we knew we would add significant value here,” said Atit Jariwala, CEO of Bridgeton Holdings.
NKF Executive Managing Directors Kyle Kovac, Michael Taquino and Daniel Cressman along with Associate Director Mandy Lee represented the seller Bridgeton Holdings. The buyer, in the off market transaction, was American Realty Advisors.
“Bridgeton Holdings did a terrific job repositioning the asset including a long-term full-building lease to Open AI,” said Kovac. “The Mission District is one of San Francisco’s most desirable and hip residential neighborhoods but it lacks scale of quality office supply due to zoning regulations and existing building sizes. This makes the Pioneer Building a rare and highly-desirable acquisition opportunity.”
According to the NKF team, San Francisco continues to be a top-performing leasing and investment market in the US, driven by more than 6 million square feet of tenant demand which includes many venture capital-backed technology companies. Average class A rents stand at $74 per square foot and vacancy remains steady at 6.1 percent.
“The San Francisco office investment market is stronger than ever. The convergence of highly liquid debt markets, record tenant demand, and limited available supply to purchase, along with a high-volume of both institutional and private capital that is ready to deploy, have combined to create the strongest market dynamics the city has ever experienced,” Kovac added.
About Bridgeton Holdings LLC
Bridgeton Holdings is a vertically integrated investor, owner, developer and manager of commercial and residential real estate. Bridgeton invests in a range of real estate asset classes, including office, hospitality and residential properties throughout the United States.
Bridgeton currently owns and/or operates over 60 properties, including three properties in San Francisco. Its most recent acquisition in the Bay Area was 995 Market Street. Bridgeton Holdings is headquartered in New York, with offices in San Francisco, CA and St. Louis, MO. Website – www.bridgetonholdings.com.
About Newmark Cornish & Carey
A dominant regional real estate force since 1935, Newmark Cornish & Carey has an expansive reach as part of Newmark Knight Frank, one of the world’s leading commercial real estate advisory firms. Regionally, Newmark Cornish & Carey has more than 280 agents in 13 strategically located offices throughout Northern California, creating a powerful platform from which to deliver superior services locally, while upholding its core values of integrity and knowledge. For further information, visit www.newmarkccarey.com.
About Newmark Knight Frank
Newmark Knight Frank (NKF) is one of the world’s leading commercial real estate advisory firms. Together with London-based partner Knight Frank and independently-owned offices, NKF’s 14,100 professionals operate from more than 400 offices in established and emerging property markets on six continents.
With roots dating back to 1929, NKF’s strong foundation makes it one of the most trusted names in commercial real estate. NKF’s full-service platform comprises BGC’s real estate services segment, offering commercial real estate tenants, landlords, investors and developers a wide range of services including leasing; capital markets services, including investment sales, debt placement, appraisal, and valuation services; commercial mortgage brokerage services; as well as corporate advisory services, consulting, project and development management, and property and corporate facilities management services. For further information, visit www.ngkf.com.
NKF is a part of BGC Partners, Inc., a leading global brokerage company servicing the financial and real estate markets. BGC’s common stock trades on the NASDAQ Global Select Market under the ticker symbol (NASDAQ: BGCP). BGC also has an outstanding bond issuance of Senior Notes due June 15, 2042, which trade on the New York Stock Exchange under the symbol (NYSE: BGCA). BGC Partners is led by Chairman and Chief Executive Officer Howard W. Lutnick. For more information, please visit www.bgcpartners.com.