By Jon Peterson
The Swig Company is hoping to earn a nice profit on its planned sale of the 105,325 square foot office property located at 274 Brannan Street. The sales price is projected to be somewhere in the range of the low $600 per square foot range or the neighborhood of $63.2 million, according to sources familiar with the property.
The San Francisco-based real estate company has owned the property since January of 2008. At that time the property was bought for $51 million, according to sources that track office building sales in San Francisco.[contextly_sidebar id=”B6svKdE8dw9hEthG9hZ3eKNe7cwX7zz7″]A representative of The Swig Company declined to comment on the sale of the property. The listing agent on the property is the San Francisco office of JLL. The real estate services company did not respond to phone calls seeking comment about the initiative.
According to Swig’s Web site, 274 Brannan has several types of uses, including a combination of data center, telecommunications, office and retail. Among the tenants in the property are Verizon Wireless and Breather. The property is now around 94 percent occupied, according to industry sources. A large portion of the building, mainly the 5th and 6th floors, will become vacant later this year. This will give the buyer an opportunity to lease them up as creative office space, which is probably the strongest and tightest submarket in San Francisco.
The sale of this property will be the second significant office building on Brannan Street brought to the market for sale this month. The other property is the 445,395 square foot 888 Brannan asset. This is a complex-owned by Boston-based Beacon Capital Partners. This asset has a more of traditional office building use. The projected price on this asset is somewhere in the neighborhood of $700 per square foot.
The assets on Brannan Street are both located in the SoMa West sub-market of San Francisco. The vacancy in this area has tightened up so far this year. According to data from the San Francisco office of Colliers International, the vacancy dropped from 5.3 percent to 4.1 percent during the first quarter. This sub-market has 41 office buildings totaling 3.4 million square feet.