By Jon Peterson
New York City-based Clarion Partners will be closing soon on the acquisition of the 76,451 square foot office building located at 410 Townsend Street in San Francisco. The purchase price will be $85.6 million, or $1,130 per square foot, according to multiple sources that track the sale of office buildings in the San Francisco market.
Clarion did not respond to several phone calls seeking comment for this story. The real estate manager acquired the property for a corporate pension fund client as a separate account investment, according to industry sources.
The sale of the property should be closing sometime over the next two weeks. The seller is New York City-based Zurich Alternative Asset Management, which advises for Zurich North America, the U.S. arm of the global insurance conglomerate. The listing agent on the sale is the San Francisco office of Cushman & Wakefield. The lead person on the sale was Seth Siegel. Other people involved included Ryan Venezia and Adam Lasoff. Cushman declined to comment when contacted for the story.
Zurich has owned 410 Townsend since October of 2013. The real estate investor had acquired the property for $49.2 million, or $643 per square foot, at that time, according to public records.
The office building currently had has no vacancies. The biggest tenant in the property is Adobe, which occupies roughly 63 percent of the property. Some of Adobe’s space has been sub-leased to Stripe, the enterprise collaboration tool. Another 10 percent of the property is occupied by Oath.
Clarion will have the opportunity to add value to the property in the future. This would be a marking-to-market of leases, since the current rents in the property are roughly 36 percent below market levels. There is more than four years of weighted average lease term remaining.
100 percent of the property has been converted to a creative/open floor plan. Zurich’s ownership tenant improvement allowance for new deals has averaged around $10 per square foot. 410 Townsend has strong transportation options nearby including Caltrain and the new Central Subway line.