By Nancy Amdur
With San Francisco’s Mid-Market neighborhood seeing much new development, an office portfolio at 1340-1370 Mission St. was recently put on the market, touted as a redevelopment opportunity.[contextly_sidebar id=”imw7YM0DYvSAcnHIrekZxBuRwkEp65lb”]The Mid-Market district is “one of the most dynamic neighborhoods in San Francisco right now,” said Kyle Kovac, senior managing director at commercial real estate firm Newmark Cornish & Carey, who is helping to market the property. “There has been a lot of transaction activity in the submarket in the last couple years.”
Selling the properties will capitalize on current investor demand in the market, Kovac said, adding that there is potential to modernize the properties for creative office use. More density also could be added. The four-story 47,294-sqare-foot office building portfolio includes properties built in 1907 and 1930. Zoning allows for a building height of 150 feet, which could add another five or six stories. The buildings could be used as office, residential or hotel space, Kovac said, and it is easily accessible to Highway 101 and Interstate 80.
According to public records, the properties were sold earlier this year. MCC 1360 LLC purchased 1340, 1360 and 1366-1370 Mission St. on May 29 for a total of $22.75 million. MCC 1360 LLC is listed at 1360 Mission St., which is occupied by affordable housing organization Mercy Housing California, according to public records. The company did not return a call for comment about the transaction.
The formerly blighted Mid-Market neighborhood began transforming in 2012 when Twitter Inc. moved into the former furniture mart at Ninth and Market streets, which led to “a whole host of new [technology] companies moving in,” Kovac said. Tech companies such as social networking service Yammer; car-sharing company Uber; and audio specialist Dolby are all located near the Mission Street property. The neighborhood also has 7,000 residential units under way or in the pipeline, Kovac said.
Other properties for sale in the area include the city-owned 30 Van Ness office building, which could provide space for up to 600 housing units.
Office vacancy in the South of Market district, which includes Mid-Market, was 3.5 percent for the second quarter 2015, according to a report by commercial real estate brokerage Newmark Cornish & Carey. The district’s blocks include Market between Fifth and Ninth streets along with properties on Mission between Fifth and South Van Ness.