By Jon Peterson
Newark, N.J., -based Prudential Real Estate Investors has acquired the 203,260-square-foot 100 Spear St. office building in downtown San Francisco for $100 million, or not quite $492 a square foot, from New York City-based Clarion Partners.
As part of the transaction, Prudential has hired Jones Lang LaSalle to be the new leasing agent on the property. The person working on this is Chris Roeder, international director in the company’s San Francisco office. According to the property’s Web site, this service had previously had been under the operation of CB Richard Ellis in San Francisco.
“San Francisco in particular is a dynamic marketplace where we have recently aggressively executed on opportunities on both the buy and the sell side and expect to continue to do so,” said Mark Weld, a Clarion managing director, in a written statement. No one from Clarion was available to speak on deadline about the sale.
Clarion was represented in the transaction by the San Francisco office of Holliday Fenoglio Fowler. The listing agents were Michael Leggett and Gerry Rohm, senior managing directors, and Director David Karol. HFF declined comment for this report.
100 Spear Street is located in the city’s South Financial District, one block from the future site of the Transbay Transit Center, which is slated to be one of the largest transportation hubs ever built on the West Coast. The office building was 91.5 percent occupied at the time of sale. The class-A property recently was modernized, including a renovation to the main lobby, remodeled multi-tenant floors, upgraded elevators and improved fire- and life-safety features.
Clarion in December paid $105.75 million to acquire 343 Sansome St. for the Tennessee Consolidated Retirement System. In July it paid $180 million for 600 California St. and $148 million for 475 Brannan St. The Sansome and California street buildings are in the North Financial District; 475 Brannan is South of Market St.
The San Francisco office market continues to perform at a high level, according to a fourth-quarter San Francisco office-market report prepared by Kidder Mathews. Year-on-year rental rates for class-A buildings were up nearly 19 percent last year. Asking rents climbed $7 to $44.14 a square foot a year.
Notable North Financial District office sales transactions in the final quarter included 475 Sansome St. for $461 a square foot and 100 Montgomery St. for $388 a square foot, according to Kidder Mathews. Notable SoMa transactions included 153 Townsend St. for $558 a square foot and 350 Mission St. for $674 a square foot.
Investment capital continues to flood the San Francisco office market. According to the Kidder Mathews report, the initial yield on some value-add deals is now in the 3 percent to 5 percent range, while projecting returns with a 6 percent upside once a property is stabilized.
Photo courtesy of 2020 Environmental Group