By Jon Peterson
Oakland-based Harvest Properties has closed on the acquisition of the 113,280 square foot 274 Brannan Street office building in San Francisco for $99 million, or roughly $874 per square foot, according to multiple sources that were aware of the transaction closing.
Harvest did not respond to emails seeking comment for this story.
The seller of the property was Los Angeles-based CIM Group. The listing agent on the sale was JLL’s San Francisco Bay Area Capital Markets team. This group included Rob Hielscher, Michel Seifer and Erik Hanson. JLL declined to comment when contacted for information on the transaction.
Part of the transaction included a loan on the property, which was secured by Acore Capital Mortgage in the amount of $107,968,000, according to public documents.
The property had originally been widely marketed starting in the fall of 2018. According to sources in the industry, there was an Asian buyer that was interested in acquiring the property, however a transaction was never consummated. Following this initial interest, the potential sale of the property was only brought to a few select buyers, and the final transaction with Harvest was considered to be an off-market sale.
CIM had owned the property for around four years. The real estate investment firm had paid $71 million, or $626 per square foot, in April 2016. This investment was completed for one of CIM’s investment funds as a value-add transaction.
Harvest has acquired the property along with Acore Capital, which provided debt for the transaction. The property now has a current occupancy of 95 percent, as stated by sources familiar with the building. There are two main tenants in the asset, one is Verizon Communications, which has a lease totaling 51,214 square feet that lasts until October 2024. Adyen is another tenant in the building; the payments tech company has a lease for 43,075 square feet through January 2026.
274 Brannan is one of a few telecommunication and data center buildings in San Francisco. Other tenants in the property taking advantage of this fact are AT&T and Mpower Communications.