By Jon Peterson
The City & County of San Francisco has put up for sale the 180,363 square foot 30 Van Ness property in downtown San Francisco. The sale of the property represents a significant re-development opportunity for the new owner of the asset. And one of the visions for the redevelopment could be a mixed-use residential tower in the heart of the city’s Mid-Market area.
“30 Van Ness represents one of the largest available re-development opportunities on the West Coast. A developer will enjoy a steady income stream from the City & County of San Francisco on a short-term leaseback as they work through their entitlements on the site,” said Kyle Kovac, executive managing director of capital markets for Newmark Cornish & Carey in its San Francisco office. His company is the exclusive advisor on the sale of the property. The other people involved in the sale for the listing agent are Michael Taquino, Daniel Cressman and Mandy Lee.
The City of San Francisco is planning to lease back the majority of the office space in the building through 2019. In a proposed lease-back structure, a new owner would only be responsible for taxes and insurance on the building, allowing for ease of management while the City occupies the building. There will be additional income coming out of the building besides the office space. Walgreens occupies the ground floor of the building, and its lease runs through the end of August in 2018. This tenant pays around $465,000 in annual rent.
The property as it stands now is 100 percent occupied. The asset is situated on a 38,123 square foot site. The property now covers five stories, plus a mezzanine level.
The property in the future could be demolished and turned into a residential project of approximately 600 units. The site is currently unentitled for this kind of use. The number of units planned for the site is based on a 400-foot height limit under current zoning. The San Francisco Planning Department’s Hub Project is in the process of exploring increasing the height limit on the site to 520 feet.
30 Van Ness is located in the Mid-Market sub-market in San Francisco. In the last four years this area of the city has accumulated more than $3.5 billion invested by a combination of institutional and private capital.
There continues to be a major housing crunch overall in San Francisco. In the last five years, San Francisco has added 87,300 new jobs, more than an 18 percent increase in the workface. At the same time, the city has added fewer than 15,000 housing units. The high demand for housing has resulted in rental and sales prices hitting record highs.