Industrial Property in San Francisco with Major Redevelopment Potential Could Fetch $25MM

San Francisco, Newmark Knight Frank, Otis Elevator, Accord Export Lines, Executive Choice Transportation, industrial market, 800 Cesar Chavez

By Jon Peterson

An industrial asset in San Francisco located at 800 Cesar Chavez with strong redevelopment potential could attract pricing of $25 million, according to sources familiar with the property and investment market in San Francisco.

The property is now owned by a private trust that is looking to sell the asset for the first time in a long time. The listing agent on the sale is the San Francisco office of Newmark Knight Frank. The lead person on the sale is Michael Taquino, executive managing director. Others involved include Kyle Kovac and Daniel Cressman, both executive managing directors, and Mandy Lee, director. Newmark Knight Frank declined to comment when contacted for this story.

The property as it stands now is a two-building industrial asset of 54,027 square feet that sits on 2.81 acres. The new owner will have a chance to add some value to the property in the near term. Some of the leases in the property have in-place rents that are significantly below market and are either on month-to-month leases or have minimal term remaining. These tenants include Otis Elevator and Accord Export Lines, which occupy the 48,612 square foot main building of the property. Others include Executive Choice Transportation, with a lease that runs through 2022, and Penske, whose lease expires in 2023.

The new owner of the property could take the property through the entitlement process for a redevelopment, as well. The potential could have many uses that would include a residential project of up to 400 units or for office space that could bring as much as 400,000 square feet. In either case, the property would have in-place revenue during that process for the new owners.

The San Francisco industrial market remains very tight. The vacancy in the market was at 3.4 percent at the end of the first quarter in 2018. Strong rental demand led by technology and manufacturing tenants has continued to push rents as the market shows no indication of slowing down.

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