By Jon Peterson
Craigslist has made the decision to sell the office asset that it owns located at 222 Sutter Street in San Francisco. The potential sales price on the property could be $100 million, according to sources that are familiar with the sale of the property.
The seller is working on the sale with its listing agent, the CBRE office in San Francisco. The people involved in the sales process includes Michael Taquino and Kyle Kovac, both executive vice presidents, and Russell Ingrum, vice chairman. CBRE declined to comment when contacted for this story.
Craigslist has been the owner of the property since March 2012. The company had paid $53.8 million for the property at that time, according to public records.
The asset is considered core plus, and it will likely attract capital sources with a strategy to grow their portfolio in this area. The new ownership will have both an opportunity to lease up existing space and bring the existing rents in the property up to market levels.
The property is now 68 percent leased. It was formerly occupied by Loehmann’s Department Store, which vacated the retail space on the lower level through the third floor. This space can be repositioned and leased up to one or multiple tenants.
Craigslist is one of the existing tenants in the property, and it occupies a full floor in the building. The property is also the home of a mixture of companies including technology, architecture and media enterprises. Four of the six office floors in the property have already been fully renovated to match the needs of creative space occupiers leaving minimal capital required going forward. The in-place rents for the property are now 28 percent below market, with 33 percent of the leases expiring in the next three years.
222 Sutter is located at the confluence of the Financial District, known for its office buildings, and the world-known Union Square retail sector of San Francisco. The office market in the Financial District remains very tight with a 2019 second quarter vacancy of 3.3 percent with a total class A space in the sub-market of 20.2 million square feet.