By Jon Peterson
San Francisco-based Juul Labs will be putting up for sale in January 2020 the 346,000 square foot office building in San Francisco located at 123 Mission, according to sources familiar with the property.
The listing agent on the sale will be the San Francisco office of Newmark Night Frank. Among those working on the sale will be Steven Golubchik, vice chairman, Mark Geisreiter, executive managing director, and Tyler Meyerdirk, senior managing director. NKF did not respond to an email seeking comment for this story.
Juul has been the owner of the property since May of 2019 when the company paid $397 million, or approximately $1,147 per square foot for the asset. The expectation is that the sale of the property has the potential to be traded at a higher price this time around. It could be in excess of $1,300 per square foot, according to sources that track the sale of major office buildings in San Francisco.
The current owner had acquired the property as an off-market transaction earlier this year. At that time, the deal was accomplished without a leasing agent, and Juul had planned to use the property partially for its own use. When Juul acquired the asset, the building was 40 percent vacant and additional space was going to become available once Salesforce vacated its space in the building.
Should the sale of 123 Mission close in 2020, it would represent the fourth time the property had been sold since 2016. In August of that year, HNA Group had acquired the property for $255 million, or $737 per square foot. The office building was then again sold to New York City-based Northwood Investors for $290 million, or $840 per square foot, in May of 2018 before Juul made its acquisition a year later.
The market fundamentals in San Francisco continue to drive institutional and private investment interest in this gateway city, according to a recent report by Newmark Knight Frank. San Francisco has seen the highest level of office rent growth in the country on a year-to-year comparison, at 8.9 percent, according to Newmark. Rents in San Francisco reached $86.23 in the third quarter of 2019, the highest average office rental rate in the country. And while overall office investment volume declined by 7 percent year-over-year, to $32.5 billion, volume in San Francisco and Seattle remained near record highs.