Clint Reilly to Sell 535 Pacific in San Francisco, Could Bring Pricing at $1,000/SQFT or $35MM

Square Mile Capital Management, Palo Alto, Sand Hill Road, Jackson Square, HFF, San Francisco, Clint Reilly, 535 Pacific

By Jon Peterson

San Francisco-based Clint Reilly Organization will be placing on the market for sale the 35,401 square foot 535 Pacific Avenue office building in San Francisco. The price point on the sale could be around $1,000 per square foot, or $35 million, according to sources familiar with the sale of the property.

The San Francisco office of HFF is the listing agent on the sale. HFF declined to comment when contacted for this story.

Clint Reilly has owned 535 Pacific since 1992. There will be a chance for the new owner of the property to add some value to the asset down the road. The property has a current occupancy of 70 percent, as stated by sources aware of the property. This vacancy covers one story of the four-story building, which is currently not occupied. Once this floor is leased, the asset would be essentially fully occupied.

535 Pacific is located within the Jackson Square sub-market in San Francisco. The office market in this part of San Francisco is one characterized by very low vacancy. The overall vacancy in the sub-market is between three percent to four percent, according to industry sources. This area is attracting venture capital and technology companies that are looking to make the move from Sand Hill Road in Palo Alto up to San Francisco.

In July of this year, Clint Reilly did receive some new financing on 535 Pacific and for another major asset it owns in San Francisco, 235 Pine Street. The loan was for $136.4 million. It was a first mortgage and mezzanine loan that was cross-collateralized and secured by the two assets.

The lender providing the capital was New York City-based Square Mile Capital Management. One part of the loan was for acquisition financing for 235 Pine. Clint Reilly had paid $129 million to buy the property earlier this year. The other parts of the debt covered refinancing proceeds to repay the existing debt on 535 Pacific and future proceeds to fund leasing and capital expenditures for both properties.

West Coast Commercial Real Estate News