By Jon Peterson
New York City-based J.P. Morgan Asset Management has been picked as the buyer of the 313,012 square foot 580 California Street office building in San Francisco, according to sources familiar with the property. The purchase price on the property will be somewhere in the range of $650 to $680 per square foot, or between $203 million to $212 million.[contextly_sidebar id=”8h6ZmDcg4mUVkUmGf0Qj9PWK06v2O4H4″]J.P. Morgan did not respond to phone calls or e-mails seeking comment for this story. The other major bidder for the property was New York City-based Morgan Stanley Real Estate, according to multiple sources that are tracking the sale of the property.
Chicago-based LaSalle Investment Management is the seller of 580 California. A company representative did not reply to phone calls and e-mails seeking comment for this story. Eastdil Secured was hired as the listing agent on the sale.
580 California is a 1986 vintage property. Two of the main tenants in the property are Regus and Blurb, Inc.
The office building is located in the North Financial District submarket in San Francisco. This sub-market has 116 buildings totaling 28.4 million square feet, according to the 2015 third quarter report by the San Francisco office of Colliers International. The vacancy in the submarket held the same at 7.4 percent from the second quarter to the third quarter.
J.P. Morgan can invest in real estate through a variety of capital sources. This could be through a separate account with a single institutional investor and commingled funds. Its main commingled fund vehicle is the J.P. Morgan Strategic Property Fund. It has a portfolio of total net assets valued at $25.6 billion, as of the end of March of this year.
This commingled fund has an open-ended structure, which allows it always to be open for new commitments from investors. It has a core investment strategy that invests around the country in a mixture of office, industrial, retail and apartments.