Northwood Investors Buys 123 Mission in San Francisco for $290MM

By Jon Peterson

New York City-based Northwood Investors has closed on the acquisition of 123 Mission office building in San Francisco for $290 million, or $840 per square foot, according to sources that are aware of the transaction.

Northwood did not return a phone call for a comment on this story. The seller of the property was HNA Group, a Chinese conglomerate.

The cap rate on the transaction was 4.75 percent. This yield is based on the current net operating income being produced by the property.

Northwood was the third buyer that had looked at acquiring the asset after the Chinese investor decided to place the property on the market. Gaw Capital was the first investor to make a run at buying it, and in March of this year, The Registry announced that the two firms were considering a deal. That discussion was then followed by J.P. Morgan Asset Management, which also passed on the asset.

HNA had owned the 346,000 square foot 28-story property for less than two years. It had acquired the property for $255 million, or $737 per square foot, in August of 2016. The property had been 95 percent occupied by a total of 14 tenants. Two of the tenants were McKesson and Salesforce.

The acquisition completed by Northwood will be its first new investment in the San Francisco Bay Area. According to the company’s web site, it currently owns other assets in a variety of markets around the country. This includes Los Angeles, Austin, Boston, Dallas, Denver, New York and Tampa.

The real estate investment firm is now out in the market raising capital for its Northwood Real Estate Partners Series VIII commingled fund. One of its recent investors in the commingled fund with a $100 million commitment is the New York State Teachers Retirement System. This investment fund invests opportunistically in the United States and in Europe.

West Coast Commercial Real Estate News