One Montgomery Street in San Francisco up for Sale, Pricing Could Reach $90MM

By Jon Peterson

New York City-based 601W Companies has placed on the market for sale the 75,880 square foot One Montgomery Street office building in San Francisco. The potential sales price on this asset would be around $90 million, as stated by sources that track the sale of office buildings in San Francisco.

The seller has hired the San Francisco office of CBRE Capital Markets to be the listing agent on the sale. The people involved in the sale includes Michael Taquino and Kyle Kovac. CBRE declined to comment when contacted for this story.

601W had paid $48 million for One Montgomery Street in 2011, according to published reports. This asset is the only property the seller owns in the San Francisco Bay Area. Most of its other properties are located in the markets of New York City and Chicago.

The property up for sale will represent a major re-leasing or re-development opportunity for the new owner. The asset is now 100 percent leased to Wells Fargo Bank. The lease with this tenant is roughly 30 percent below current market levels, and the lease is scheduled to expire in December of next year. There seems to be strong demand from tenants that are looking at space in the range of 50,000 to 75,000 square feet, which could place this property in their sights. According to industry sources, there are 13 tenants in the San Francisco market seeking space in the range of 50,000 to 75,000 square feet for a combined requirement of 790,000 square feet.

The re-development options, if this would be an avenue the new owner would like to pursue, could vary. The site could be a fit for a high-end residential condominium project, luxury brand hotel or a mixed-use project that incorporates a combination of both uses.

One Montgomery Street has a very strong location as far as transportation is concerned. It’s less than a block away from the Montgomery Street Station, which serves BART and San Francisco Muni lines. There are over a dozen of San Francisco Muni and Golden Gate Transit bus stops within blocks of the property, as well.

The office building is located within the North Financial District sub-market in San Francisco, which has the highest overall Class A asking rents in the city. This figure is now at $82.36 per square foot, according to sources that track this information in San Francisco.