By Jon Peterson
PGIM and Montgomery Corporation in San Francisco have placed on the market for sale the Daniel Burnham Court Medical Offices in San Francisco located at 1 Daniel Burnham Court. The pricing guidance on the planned sale is $75 million, or roughly $697 per square foot, according to sources familiar with the sale of the property.
PGIM declined to comment when contacted for this story. The institutional owner and Montgomery have owned the property for several years, and they’ve hired CBRE as the listing agent on the sale. Kyle Kovac and Mike Taquino, both executive vice presidents, are leading the sale for CBRE out of the firm’s San Francisco office, along with Chris Bodnar, a vice chairman, who runs U.S. Healthcare & Life Science Capital Markets group in Denver.
The action taken on this property represents a rare opportunity. San Francisco in general doesn’t have a lot of medical office assets and very few of them come up for sale, according to sources that track the San Francisco medical office market.
The Daniel Burnham Court property totals around 107,595 square feet. The property is currently 70 percent occupied, according to the property’s offering document. This fact means that the property is likely to attract core plus investors that are looking to expand its investments to a market on the West Coast.
The tenants in the property now have a weighted average remaining lease term of 5.9 years. Major tenants in the property include the UCSF Health Cardiovascular Care and Prevention Center and Spring Fertility. Other medical specialties represented in the property include dentistry, pain management, pediatrics, OB/GYN and vascular surgery tenants.
The property also offers what is considered a rare amenity in San Francisco — a subterranean parking garage.
This is a strong location for these tenants. The property stands directly adjacent to Sutter Health’s brand new $2.1 billion California Pacific Medical Center Van Ness Campus, a flagship, state-of-the-art regional acute care hospital.
The asset up for sale also has Verizon occupying one of the two street level retail spaces. Not included in the sale are the 245 residential condominiums rising above the medical offices and retail spaces.