By Jon Peterson
An un-named institutional owned based in Switzerland has placed on the market for sale the 135,116 square foot Potrero Business Center industrial/office asset in San Francisco. The asset is being marketed un-priced, as stated by sources familiar with the property.
The current ownership of the property has held the property since December 2013. It had acquired the asset for $24.6 million, according to public records.
The listing agent on the sale is CBRE. Two people part of the sale are Darla Longo, vice chairman, and Rebecca Perlmutter Finkel, senior vice president. CBRE declined to comment when contacted for this story.
The property is comprised of three buildings located at 1740, 1750 and 1760 Cesar Chavez Street in San Francisco’s Potrero Hill neighborhood. All three of the buildings were constructed in 1985, and they are now leased to 19 tenants with no vacancy in the asset. The tenants in the property include food services, technical services, education, government, distribution, engineering, construction and retail trade. These businesses occupy space ranging from 1,960 to 24,000 square feet.
The current financial makeup of Potrero Business Center will allow some additional income to be brought into the asset in the future. In-place rents in the property are now 18 percent below market, according to some estimates, and an average lease time remaining for the leases is in the range of 2.8 years. The property has a history of keeping tenants for a long time. Half of the tenants in the asset have been in the property over 10 years, and nearly three quarters of the tenants over five years.
Potrero Business Center is located within the San Francisco industrial market, which is one of the tightest markets in the country. Current vacancy is 1.2 percent with 0.9 vacancy for warehouse product. The continued conversion of industrial assets to residential and office/R&D life science has decreased the San Francisco industrial based to 23 million square feet, down 15 percent over the last 10 years.