By Jon Peterson
Pembroke Real Estate, with offices in Boston and Washington, D.C., has been selected as the buyer of 140 New Montgomery Street in San Francisco. The purchase price came in at $992 per square foot, according to public records. At that price, the deal closed at $284 million on April 21, 2016. The transaction represents a record price on a square foot basis paid for office buildings in San Francisco.[contextly_sidebar id=”lmtyiUhkBKaANpKJczoohlYXLDozjkPR”]Pembroke did not respond to phone calls and e-mails seeking comment for this story.
The seller of the property is a joint venture between San Francisco-based Stockbridge Capital Group and Wilson Meany. Neither of these San Francisco-based firms responded to inquiries for this story. The listing agent on the sale of the property is the San Francisco office of Eastdil Secured.
The sales price on the property would still put the property just below replacement cost for office buildings in San Francisco, which sources tracking this information put it at $1,000 per square foot.
The purchase price on 140 New Montgomery is high as the property has attracted some very high rents in the property. The office building has rents that are closer to current market rents than just about any other office asset in the city for this time period. Sources that focus on the office building market in San Francisco believe that the property is one of the strongest properties in San Francisco and should hold its value over a long time period.
140 New Montgomery is a property that has 286,092 square feet of office space and 9,000 square feet of retail, according to the Wilson Meany’s Web site. The property had been 90 percent leased prior to the completion of the renovation by the sellers. Two of the larger tenants in the property are Yelp and G2 Insurance Services.
Pembroke Real Estate does own one other office asset in the San Francisco market, according to its Web site. This is the 100 California Street office building. The company paid $630 per square foot or $181.4 million for the property in 2014, according to sources aware of the transaction.