Swig Places 901 Battery in San Francisco for Sale; Could Fetch $50MM

San Francisco, Shorenstein, 901 Battery, The Swig Company, Newmark Cornish & Carey, BAR Architects, Kyle Kovac, Michael Taquino, Daniel Cressman Mandy Lee

San Francisco, Swig Company, Bay Area, Newmark Cornish & Carey, NGKF Capital Markets

By Jon Peterson

San Francisco-based The Swig Company might attract a sales price of approximately $50 million or $700 per square foot for the 72,000 square foot 901 Battery Street office building in San Francisco, according to sources that the track the sale of office buildings in San Francisco.

Swig is selling the property with the property’s listing agent, Newmark Cornish & Carey through its NGKF Capital Markets entity. The people involved are Kyle Kovac, Michael Taquino and Daniel Cressman. They are all executive managing directors with the firm. Newmark declined to comment when contacted for this story.

Swig has owned the property since December of 2012 when it acquired the building for around $22.49 million, according to public documents. “We have completed our business plan, and we believe that now is a good time to be a seller in the San Francisco office market. There just isn’t a great deal of institutional quality product on the market to buy right now and plenty of capital sources looking for properties,” says Tomas Schoenberg, an executive vice president of investments with Swig.

Swig had invested $5.4 million in capital improvements since it had owned the asset. One part of this was to make improvements on the third floor of the building, which would allow all of the 19,000 square feet to be leased to a single tenant instead of the space being broken into smaller suites leased to several tenants. This turned out to be successful as BAR Architects signed a lease to take the entire floor. The lease on this floor was arranged by Bart O’Connor, a senior managing director with Newmark Cornish & Carey. Other improvements included lobby and façade renovations, base building improvements and state-of-the-art tenant improvements. The overall occupancy of the property is 96 percent.

The new owner of 901 Battery will have a chance to add some value to the property in the future. The first part of this is that 45 percent of the existing leases come up for renewal by 2018. Another factor is that in-place rents are now 28 percent below current market rents.

There also is 7,600 square feet of the lower level space in the property that can be converted to office space by interconnecting the floors via an internal stairwell once Viscira’s leases expires in 2020. An additional value-add play at the property includes a nearby parking operation located at 998 Sansome. This is a 4,100 square foot parcel with 24 parking spaces located across the street. This could be fully entitled and developed as a boutique mixed-use project under an 84-foot height limit. A feasibility study along with renderings have been prepared by architect Charles Bloszies.

The sale of the property should attract a wide variety of capital sources. This would include institutional and private capital investors that are either located in the United States or internationally.

West Coast Commercial Real Estate News