New York Life Looks at Big Profit for Sale of 250 Montgomery in San Francisco

250 Montgomery, New York Life Real Estate Investments, San Francisco, Financial District, Cushman & Wakefield, Argonaut Private Equity Group, Lembi

By Jon Peterson

The San Francisco office of New York Life Real Estate Investments could be getting a large profit on the sale of the 118,600 square foot 250 Montgomery Street office building in San Francisco. The real estate investor has put this property on the market for sale, according to several sources that track office buildings sales in San Francisco.

250-Montgomery_1New York Life has awarded the listing on the sale to the San Francisco office of Cushman & Wakefield. One person working on this is Seth Siegel, an executive director in the capital markets division of Cushman & Wakefield. He and New York Life did not respond to phone calls seeking comment for this story.

The sales price on 250 Montgomery is projected to be somewhere in the neighborhood of $600 per square foot, according to multiple sources that are aware of the sale. New York Life has owned the property since May of 2011 when it paid $37 million or $311 per square foot to buy the property.

The cap rate on the sale of the property is projected to be somewhere around 4 percent. This yield would be based on the current net operating income being produced by the asset.

The property, which was built in 1986, is currently 86 percent occupied to several tenants. The office building was formerly developed and owned by the San Francisco-based Lembi Family. This real estate investor ended up losing many over-leveraged apartments complexes in San Francisco during the financial crisis.

The office building was sold by a lender in late 2009 for around $175 per square foot to Tulsa, Oklahoma-based Argonaut Private Equity Group. This company then sold the asset to McMorgan & Co., which is now controlled by New York Life.

Photo courtesy of Heller Manus

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