Madison Capital and PGIM Real Estate Acquire 360 Spear Street in San Francisco for $95MM

(EDITOR’S NOTE: According to public documents, the seller of the property is Digital Realty. This company had owned the property since December of 2011, when it paid $82 million for it.)

SAN FRANCISCO – Madison Capital and PGIM Real Estate have acquired and will reposition 360 Spear Street in San Francisco’s dynamic South Financial District. The acquisition is valued at $95 million. 360 Spear is a five-story, 160,451-square-foot mixed-use building comprising 49,992 square feet of office and 110,459 square feet of life science, light industrial and production, development and repair (PDR) space. The property is approximately one-third leased to major credit tenants, Verizon Wireless and AT&T, and two-thirds will be designated for light industrial and creative office tenants.

360 Spear Street is located at the northwest corner of Spear Street and Harrison Street, one block west of the Embarcadero waterfront. The property has bay views and is close to numerous food, fitness, and lifestyle amenities including the Ferry Building Marketplace, the Rincon Center, the Embarcadero Promenade and the Transbay Center Redevelopment.

The acquisition marks the continued expansion of Madison Capital’s portfolio in the West Coast and adds to PGIM Real Estate’s longstanding investment presence in the region. This is the second investment in San Francisco by Madison Capital and PGIM Real Estate, following the venture’s September 2017 acquisition of 150 Post, a mixed-use office and high street retail property in Union Square.

“This is a rare opportunity to acquire an irreplaceable asset in San Francisco’s most dynamic office market, supported by attractive growth drivers, including excellent access to mass transportation, desirable residential neighborhoods, the Embarcadero waterfront, and a high density of leading companies. We look forward to repositioning the property into a premiere creative office asset,” said Jonathan Nachmani, director at Madison Capital. Madison Capital plans to continue its expansion in the West Coast with a strong focus on value-add opportunities along office corridors and high street retail in the San Francisco Bay Area and Pacific Northwest.

“The acquisition of 360 Spear Street adds to our portfolio another high-barrier property with significant optionality, located in a prime San Francisco market that is poised to attract high-quality tenants seeking accessibility and a strong amenity base,” said Alfonso Munk, PGIM Real Estate’s Americas chief investment officer. “In partnership with Madison Capital, we look forward to executing a capital improvement program to reposition the property from predominantly data center use to a best-in-class creative build-out that appeals to office, life sciences and technology users.”

The acquisition of the property was led by Tim Hennessey, San Francisco-based managing director and head of West Coast Transactions at PGIM Real Estate, and Jonathan Nachmani from Madison Capital. Seth Siegel with Cushman & Wakefield served as broker.

About Madison Capital
Madison Capital is a leading real estate investment and operating company focused on acquiring and repositioning superior urban retail and mixed-use assets in dynamic markets including New York and other gateway cities. Targeting income-producing and value-add opportunities in interesting, evolving neighborhoods, the firm employs a focused and disciplined approach to its investments. With the inherent supply and demand characteristics of urban retail, this asset class offers compelling risk adjusted returns. Since the firm’s inception in 2002, Madison Capital has grown its portfolio organically, acquiring one asset at a time to over $2.1 billion of current assets under management. For more information, please visit the firm’s website at http://mcapny.com.

About PGIM Real Estate
PGIM Real Estate is the real estate investment business of PGIM, the global investment management businesses of Prudential Financial, Inc. (NYSE: PRU). Redefining the real estate investing landscape since 1970, PGIM Real Estate has professionals in 18 cities in the Americas, Europe and Asia Pacific with deep local knowledge and expertise, and gross assets under management of $69.2 billion ($49.5 billion net) as of June 30, 2018. PGIM Real Estate’s tenured team offers to its global client base a broad range of real estate equity, debt and securities investment strategies that span the risk/return spectrum. For more information, visit pgimrealestate.com.