125-foot apartment tower with ground floor retail planned for former site of the Embassy Theater in San Francisco’s rapidly transforming Central Market area
SAN FRANCISCO (Dec. 21, 2012) – MacFarlane Partners, a real estate investment manager that specializes in investments that promote smart growth, urban revitalization and sustainability, announced today the $7.8 million acquisition of 1125 Market St. in San Francisco, the site of the former Embassy Theater, which was razed after it was damaged in the Loma Prieta earthquake.
The 12,401-square-foot project site is the remaining vacant lot in San Francisco’s Mid-Market area, and is directly in front of the Federal Building, across the street from UN Plaza and just east of the former Strand, which the American Conservatory Theater plans to revive as a 300-seat theater with rehearsal spaces and a restaurant.
MacFarlane Partners will begin the design and entitlement process for the property, which is zoned C-3-G, permitting both residential and commercial development. The plan is to develop the site with an undetermined number of multifamily units and parking stalls, as well as 3,500 square feet of retail space. The exact number of units will be determined after meetings with city planning officials. No architect has been selected; however, construction is anticipated to begin in early 2014.
“We think Mid-Market is the place to be,” said Greg Vilkin, managing principal and president of MacFarlane Partners. “And we think the city has done a commendable job of re-imagining Mid-Market. If you were to look at that area in 2015, it’s going to be a vibrant part of the city and we want to be part of it.”
MacFarlane Partners is currently topping out a 113-unit apartment development up the street at 1844 Market St., purchased in May 2011. Both of MacFarlane Partners’ investments on Market St. within the past 18 months are on behalf of MacFarlane Urban Real Estate Fund III (“Urban Fund III”), a closed-end, commingled fund managed by the firm. Urban Fund III is pursuing an investment strategy that MacFarlane Partners pioneered in the 1990s on behalf of institutional investors: acquiring, developing, redeveloping and repositioning properties in urban and high-density suburban submarkets of select metropolitan areas nationwide that promote smart growth, urban revitalization and sustainability.
“This investment reflects our confidence in the strong market for apartment properties in the San Francisco Bay Area, which continues to experience a significant increase in rents for the past year,” added Vilkin. “While the transit-oriented development has yet to be designed, it will incorporate the best elements of smart growth and new urbanism, which are hallmarks of our developments.”
1125 Market Street is located at the heart of the transformation of the surrounding Central Market area (between 5th and 10th streets) in downtown San Francisco. The neighborhood has long been a center for entertainment, arts and retail and is seeing a renaissance spurred by City initiatives sparking everything from new housing to office space to hospitality and retail; strong job growth; and, an influx of young tech workers moving to the area. Large employers Twitter, Dolby, Square, Yammer, One King’s Lane, ZenDesk, and Zoosk are flocking to the area, partly in thanks to the payroll tax exemption passed in 2011, and the demand for local affordable and market rate housing, particularly within walking distance, will remain strong. The site is an attractive location for residents due to its proximity to major employers and SoMa, Hayes Valley and downtown San Francisco – all easily within walking distance. A variety of public transportation options are also immediately accessible, including the light rail, and a Muni and BART stop directly outside of the project. Additionally, both the 101 and 280 freeways are within a five-minute drive.
TRI Commercial agents Anton Qui and Cary Cohen and Jay Cross represented the buyer and David Wienties and Clayton Jew of Kidder Matthews represented the seller, who was undisclosed.
About MacFarlane Partners
MacFarlane Partners is a real estate investment management firm that manages approximately $5 billion in assets on behalf of some of the world’s largest pension plans and institutions. Founded in 1987, the firm pioneered the urban investment concept among institutional real estate investment managers in the 1990s and today is a leading capital provider for properties that promote smart growth, urban revitalization and sustainability in urban and high-density suburban areas nationwide. MacFarlane Partners is headquartered in San Francisco, with regional offices in Washington, D.C., and the greater New York metropolitan area. For additional information, please visit the firm’s website at www.macfarlanepartners.com