By Nancy Amdur
Seattle-based alternative investment firm Columbia Pacific Advisors, LLC gained an asset in San Francisco’s rapidly growing Van Ness Corridor with its recent acquisition of an office building at 939 Ellis St.[contextly_sidebar id=”519ad96f0103910ef2acc8c793f32536″]While terms of the deal were not disclosed, industry sources approximated that the 116,000-square-foot property sold for between $20 million and $23 million.
Bay Area Air Quality Management District sold the building and will remain there as a tenant through 2015. Columbia Pacific Advisors is evaluating options for the property following the end of that lease, including possibly converting it to senior housing.
“We’re looking at senior housing but also like it as a potential office renovation,” said Todd Seneker, the managing director of Columbia Pacific Advisors. “We feel good about the area and both of those strategies.”
Seneker said the company is “entrepreneurial” in its investment strategies, and was drawn to the Ellis Street building partly due its location.
“It is in a changing area,” he said. “The Van Ness Corridor is becoming more desirable with every day that passes.”
“[The corridor] is an extremely active market,” said Jeffrey Moeller, a senior vice president at Cassidy Turley Commercial Real Estate Services in San Francisco, who is assisting with leasing the property and was part of the team that represented the investors in the transaction. Columbia Pacific Advisors is “open to a number of solutions” for the property, he added.
Accessibility to transportation, services, restaurants and cultural institutions help make the district an attractive option for more housing, said Colin Yasukochi, director of research and analysis at CBRE Global Research and Consulting in San Francisco.
The corridor also has room for growth. “Its an area where there are still values in acquiring and redeveloping [property]. There are underutilized properties in the area,” Yasukochi said.
The Ellis Street property is two blocks from California Pacific Medical Center’s $2 billion Cathedral Hill hospital under construction at Van Ness Avenue and Geary Street. The hospital is scheduled to open in 2019.
Also, San Francisco-based companies South Beach Partners and Oryx Partners this month reportedly paid around $26 million to purchase KRON-TV’s headquarters at 1001 Van Ness Ave., which is slated to become multifamily housing.
This is Columbia Pacific Advisors’ second recent San Francisco purchase. In April 2013, the company bought a 16-story, 85,000-square-foot office building at 995 Market St. in a joint venture with San Francisco-based Long Market Property Partners. The building is now undergoing interior and exterior renovations, Seneker said.
The company is targeting the city for more investment opportunities. “We will continue to look at San Francisco,” Seneker said. “It has great things going for it— high barriers to entry, geographic constraints and solid economic fundamentals. [Also,] the tech corridor is booming there, so it’s not just pure financial services there.”
Long Market Property Partners oversaw the sale of 939 Ellis St. Along with Moeller, Cassidy Turley’s Peter Conte and Zac Monsees worked on the deal and are helping to lease the property. Tom Christian and Ric Russell of Cassidy Turley represented Bay Area Air Quality Management District in the transaction.
Columbia Pacific Advisors real estate investments are spread nationwide and include senior and multifamily housing, industrial, hospitality, mixed-use and retail properties.
Map courtesy of Apple