By Jon Peterson
The Florida State Board of Administration has put on the market for sale the 650,000 square foot One Front Street office building in San Francisco with the potential sale coming in at $520 million or somewhere in the low $800 per square foot range, according to multiple sources that are aware of the potential sale of the building.
The Florida State Board of Administration had bought the property on October 22, 1996. It had paid $103 million for the asset for the asset at that time, according to an e-mail received from the pension fund. When the asset was bought, it was acquired as a separate account asset through Equitable Real Estate Investment Management. The property is now being managed by Invesco Real Estate.
The listing agent on the sale is the San Francisco office of Eastdil Secured. This company declined to comment when contacted for this story.
Florida has owned the property through a separate account relationship with Atlanta-based Invesco Real Estate. The property is considered to be a true core trophy asset in San Francisco. The San Francisco property has been in its current ownership for a long time.
The asset is now fully leased. Some of the tenants in the property include the Northern California headquarters for JLL and architecture firm Skidmore Ownings & Merrill. The JLL office also handles the leasing efforts for the office building.
The property should be attractive to a wide mixture of investors that are looking for a core office building asset in San Francisco, and according to sources, this could be either domestic or international capital.
According to the property’s Web site, the asset was constructed in 1979. One Front Street is a Class A asset. It’s located at Market and Front Streets connecting the North and South Financial markets. According to data compiled by JLL, the North Financial District for Class A space totals 21.1 million square feet with a vacancy of 10.4 percent through the second quarter of this year. The Class A space within the South Financial sub-market has 21 million square feet and a 6.4 percent vacancy for the same time period.
Florida’s pension fund uses a variety of structures to invest capital in real estate. This can be on a direct basis through separate accounts or joint venture partnerships like the setup on One Front Street. The pension fund will also invest through many commingled funds. This can be in open-ended and closed-ended commingled funds.