Columbia Property Trust to Buy 201 California in San Francisco for $239MM

By Jon Peterson

Columbia Property Trust is on the verge of acquiring the 272,000 square foot 201 California Street in San Francisco. The purchase price is projected to be $239 million, or just over $878 per square foot, according to a statement from the company.

Columbia declined to comment when contacted for this story initially, however, the firm issued a statement later today. The sale of the property has not closed yet but is expected to have a close sometime in the near future. The listing agent on the sale is the San Francisco office of Eastdil Secured.

The pricing on the asset landed at almost exactly what the guiding pricing of $240 million had been established when the office building was put up for sale in September, as The Registry reported earlier this year.

“We now have greater clarity on the timing and execution of several significant transactions in our portfolio, which allows us to provide preliminary guidance for our earnings expectations for the year ahead,” said Nelson Mills, CEO of Columbia in a statement. “Our initial 2020 guidance also incorporates our assumptions regarding the financial impact from our acquisition of the Normandy platform, which we expect to close at or just after the end of the year. The Board’s decision to increase the dividend rate reflects our confidence in the company’s strength today and expectations for continued growth.”

The current owner of the office building is Beacon Capital Partners. This property manager owns the asset through its commingled fund, Beacon Capital Strategic Partners Fund 7. This fund had paid $179 million for the property in 2017.

With this sale, the asset will have traded for the third time in five years. In 2014, 201 California was acquired by Barings Real Estate Advisers for $133 million.

Located at the corner of California and Front Streets, the 17-story building has been substantially renovated and is 97 percent leased to multiple tenants, the largest of which are First Republic Bank, Dow Jones, and the law firm Cooper, White and Cooper. The building has substantial roll over the next five years, with in-place rents estimated to be at least 10 percent below market, giving Columbia an opportunity to take advantage of continued demand in the market and drive further growth in rental rates.

“We are very pleased to be putting the proceeds from our dispositions to work by adding another exceptional asset to our San Francisco portfolio,” Mills said. “With its highly desirable location, amenities and structural attributes, 201 California is positioned to perform in line with our other successful investments in the Bay Area, and we look forward to the opportunity to put our local knowledge and capability to work to improve rates even further at the property in the years ahead.”

Columbia is a publicly-traded real estate investment trust that owns and develops office buildings in many markets across the United States. Its primary markets are San Francisco, New York City and Washington, D.C., as stated on the company’s website. Other markets where the company is actively investing include Boston, Los Angeles and Pittsburgh.

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