By Jon Peterson
Foster City-based Legacy Partners has placed its 295,000 square foot 160 Spear Street office building in San Francisco on the market for sale, according to multiple sources familiar with the property.
Legacy did not respond to several phone calls seeking comment for this story. The real estate investment company has hired Eastdil Secured in its San Francisco office to be the listing agent on the sale.
The sales price of this property is projected to be somewhere in the range of $625 to $650 per square foot or in excess of $184.3 million, according to sources familiar with the transaction.
Legacy Partners will be selling the property on a fee simple basis. Until December of last year, the company did not own the property this way. It had the property on a ground lease arrangement. The real estate company in December bought the land that was underneath the property. This should allow Legacy to sell the property at a much higher value. This could be anywhere from 10 percent to 50 percent more, according to sources familiar with the transaction.
Legacy Partners has owned 160 Spear for a long time. The real estate investor acquired the property in December of 2006 for $86 million or 290 per square foot from San Francisco-based Ellis Partners.
The property was built in 1984. The current occupancy of the property is 92 percent. The largest tenant in the building is the UC Berkeley Extension. Last month Databricks moved into the property, now occupying the 13th floor and covering 15,850 square feet. The company uses this space for its headquarters location, which was previously in Berkeley. Other tenants in the property are Workday and Mediaplex.
160 Spear is located in the South Financial District sub market in San Francisco. The vacancy rate in the submarket changed a little bit during the last quarter of 2014. According to data from the San Francisco office of Colliers International, the vacancy went from 7.2 percent in the third quarter to 7.8 percent in the fourth quarter. This submarket has a total of 99 buildings covering 24.8 million square feet.
Rental rates in the overall Financial District moved up. Colliers stated in its 2014 fourth quarter report that weighted average rents for the region reflected a 6.8 percent increase during the fourth quarter to $69.11 per square foot and annualized rents increased by 18.5 percent.