By Jon Peterson
Chicago-based Kinship Capital, in partnership with Pearlmark Real Estate Partners and Madison Marquette, has sold the 39,162 square foot 300 Grant Avenue property for around $50 million, according to sources aware of the transaction.
Kinship declined to comment on the sales price of the price due to a confidentiality agreement signed between the buyer and seller. The buyer of the property is St. Bride’s Managers, a UK-based global property investment management firm, which has offices in the United States in Stamford, Conn. It did not respond to phone calls and e-mails seeking comment for this story.[contextly_sidebar id=”7zooKpY4fXFhFfNcULz7NADTHthAt85R”]The sale of the property occurred much faster than Kinship though this would happen. “We had acquired 300 Grant in December of 2012. At that time we had envisioned that we would hold on to the asset for five years or more. We didn’t anticipate that the market in San Francisco would take off like it has over the past two years,” said Nick Thomson, a principal with Kinship Capital. He wouldn’t reveal the price his company paid for the property in 2012, due to a confidentiality agreement with the seller.
The sellers of the property traded the asset through its listing agent, the San Francisco office of HFF. Nicholas Bicardo, a managing director in the office, worked on the transaction. He declined to comment on the sales price of the asset.
“The buyer of the property has a lot of options on this asset. One is a re-leasing. The existing tenants have short-term leases where all of them could be out of the property in 24 months. These leases are about 20 percent off market. None of the current tenants are considered to be strong credit tenants. The value of the asset would be increased greatly by bringing in a flagship tenant to occupy most if not all of the property,” said Bicardo.
The retail property does have the potential for a redevelopment play. The 10-story asset has entitlements in play now for 16,000 square feet of retail on the ground and second floors, 45 condo units and a two-level subterranean parking structure totaling 40 spaces. “These entitlements run until the end of this year, so I’m not sure what the new owner of the property has in mind for the future of the asset,” said Thomson. The expectation is that these entitlements could be extended by the new owner.
The sellers did not have to make any major improvements to the asset. The property was 100 percent occupied at the time of the sale. The tenants in property include Calvin Klein Performance, Industry Denim, Optical Underground, West Coast Leather and Jin Wang. The property was first developed in the early 1900s and has since been renovated twice in 1986 and 1999.
According to its Web site, St. Bride’s has an international real estate investment strategy. Part of this is buying assets in major markets in North America. Besides San Francisco, the firm has invested in Los Angeles, Boston, Chicago, New York, Toronto, Vancouver and Washington, D.C.
Kinship Capital buys real estate assets for the Searle family, which has owned and operated pharmaceutical businesses in Chicago for more than 100 years. The buyer is looking to invest in transactions that can have an opportunistic theme or are core assets that are fully leased.
The company looks to invest in a combination of assets that include office, retail, apartments and land. Its focus in the San Francisco Bay Area is on assets in downtown San Francisco and the Silicon Valley.