(EDITOR’S NOTE: According to sources familiar with the deal, the sale closed for a price of $33 million, or $657 per square foot based on the footage provided in the release below.
The property is now 100 percent occupied. It is leased to six tenants that include a mixture of financial companies, tech and media firms. Two floors in the property will come up for renewal in the next 24 months, and rents in the property are presently 20 percent below market. Seth Siegel of Cushman & Wakefield represented both parties. Jackson Square as a sub-market has a current vacancy of 7 percent, according to Peter Staver, a senior investment manager for Grosvenor. He works out of the company’s regional office in San Francisco and covers the California markets for the company, which includes the San Francisco Bay Area and Los Angeles.)
Grosvenor Americas (Grosvenor), a private property investment and development company, today announced the acquisition of 394 Pacific Avenue, a 50,220-square-foot office building in San Francisco, from PMI Properties.
The five-storey, brick-and-timber office building is located at the corner of Pacific Avenue and Sansome Street in the heart of Jackson Square, one of San Francisco’s classic boutique office neighbourhoods.
“The dynamic features at 394 Pacific Avenue, including original brick walls, exposed structural elements and efficient 8,900-square-foot floor plates, are in high demand from a wide range of tenants.” said Peter Staver, Grosvenor’s Senior Investment Manager. “We will build on the existing improvements by activating the ground floor street experience and installing a new lobby, enhancing the façade and exposing the original exterior brick walls.”
Grosvenor completed a similar renovation of their six-storey building at 185 Post on Union Square, including upgraded building systems and a new window wall façade that artfully preserved the original brick exterior. The property received an Excellence in Architecture Honor Award from the San Francisco chapter of the America Institute of Architects (AIA). This acquisition will complement Grosvenor’s portfolio of heritage office and retail buildings in Union Square at 251, 185 and 180 Post Street.
Originally constructed in 1907, 394 Pacific Avenue was substantially renovated (including a seismic retrofit) in 1981. The area is centrally located between North Beach, Chinatown and the Financial District which is a short walk from the North Financial District and just several blocks from the Central Subway’s Chinatown extension which will provide future connectivity to BART, Caltrain and SoMa.
“This investment fits our long-term strategy of acquiring well-located urban properties in San Francisco,” said Michael Beattie, Grosvenor’s Chief Investment Officer. “The Jackson Square sub-market is an up-and-coming area that continues to improve.”
The property is located just one block from Grosvenor’s 240 Pacific Avenue mixed-use development at the corner of Pacific Avenue and Battery Street, which recently received unanimous Planning Commission approval for the development of 39 boutique residences designed to fit within the historic aesthetic of Jackson Square.
Grosvenor was represented by Seth Siegel from Cushman & Wakefield.