In a transaction that closed earlier this week, Ellis Partners, one of San Francisco’s steadfast commercial real estate investment companies, expanded its footprint across the region when it paid $231 million (roughly $1,290 per square foot) for the 179,000 square foot creative office building located at 153 Townsend Street, according to public documents filed with the county.
The Class A building is located across the street from the San Francisco Giants’ Oracle Park in the SoMa district of San Francisco, and it is home to Lehi, Utah-based Ancestry, a genealogy and technology firm. The property was sold by Los Angeles-based American Realty Advisors, which purchased the building in December of 2012 for $93.75 million.
Ellis Partners, through a statement provided by its brokerage firm CBRE, disclosed that the purchase was made through an investment fund the firm formed with New York State Common Retirement Fund in 2019. According to earlier reporting by The Registry, the joint venture, EPNY Ventures I LLC, was seeded with a $200 million equity from the pension fund. The goal of the fund was to invest in core assets across the region, which includes a mixture of office, industrial and retail assets. The expected leverage on the venture is 40 percent at the portfolio level. The targeted returns will be 8 percent to 10 percent on a gross basis.
New York Common considers Ellis Partners as a strong manager, and their relationship dates back to its initial investment in the firm in 2012. The pension fund wrote in an email to The Registry that “Our relationship with Ellis dates back to 2012 when the emerging manager program was established. Through this program, we have indirectly invested with Ellis in 5 projects in the San Francisco Bay Area that have significantly exceeded return expectations. Ellis’ long tenure and consistency as one of the best performing emerging managers have resulted in graduating to a direct relationship with the pension fund.”
The purchase is the first investment Ellis Partners made from the EPNY investment vehicle.
“We are thrilled to be adding 153 Townsend to our core portfolio and look forward to identifying complementary investments to fill out the balance of our venture,” said Jason Morehouse, Partner and Director of Acquisitions at Ellis Partners in a prepared statement. “We are grateful to Mike Taquino, Kyle Kovac, and the entire CBRE team for their expert help on this important acquisition.”
CBRE’s San Francisco Debt & Structured Finance team, led by Mike Walker and Brad Zampa, arranged the non-recourse, fixed-rate financing with full-term interest-only payments from a Life Insurance Company on behalf of the Ellis Partners, according to the brokerage firm.
The property sits across the street from Oracle Park and was originally constructed in 2002. The building is 100 percent leased and features 379 parking stalls. Amenities include bike storage, showers and locker rooms. 153 Townsend also offers large decks on upper floors, providing expansive views of San Francisco Bay and SoMa. The Caltrain terminal and Central subway are within two blocks of the site, providing immediate access to public transit, according to a statement from CBRE.