By Jon Peterson
Newport Beach-based T 2 has decided to place on the market for sale the office asset that it owns in San Francisco located at 345 4th Street. The pricing guidance on this sale is at $65 million, according to sources that track the sale of office buildings in San Francisco.
The property owner has hired the San Francisco office of CBRE Capital Markets to be the listing agent on the sale. The two main people involved in the marketing of the property are Mike Taquino and Kyle Kovac, both executive vice presidents. CBRE declined to comment when contacted for this story.
The property has a total rentable area of 59,337 square feet. The office building portion totals 56,106 square feet over seven stories, while the remaining 3,231 square feet is available for retail leasing on the ground floor.
The office portion of the property is fully leased to WeWork. This space is one that WeWork has stated it wants to hold on a long-term basis, according to industry sources. WeWork has signed a 12-year lease for its space with a rental rate that is considered to be at a market rate.
The project at 345 4th had a construction start date of about a year ago. Presently, the foundation and the first floor of the building have been completed. No other parts of the project have been finished at this time. Since, the project is still under development, it is understood that the new owner of the property would likely have the ability to affect the design of the interior office space. Due to COVID-19, development of office space will most likely have to be reconsidered to take into account the new norms imposed by the global pandemic. Its projected that the office complex would be scheduled for delivery by the second quarter of 2021.
The architect on the project is San Francisco-based Stanton Architecture. Some of the project’s features include balconies throughout the upper floors, a roof deck featuring skyline views of San Francisco, an art-filled pedestrian walkway at grade, bike parking, showers and lockers and a vegetated roof.
The anticipation is that 345 4th will benefit from the passing of Proposition E that occurred in March of this year. It further curbs new office development by tying the amount of office development allocation available from Proposition M to the affordable housing goals of the city. According to CBRE projections in the offering document for 345 4th, the new restrictions will permanently reduce the Prop M availability and prevent nearly all new office projects from approval until 2030 or beyond.
345 4th has a strong public transit location. Its just steps from the future Moscone Central Subway station at 4th and Folsom, which is projected to open by Summer 2021. The asset is also three blocks from Market Street, the city’s main artery that offers BART and Muni service via the Powell Street Station.
T 2 is mostly known as an owner of hotel assets. Two of its existing properties are located in Silicon Valley, according to its website. These includes the 183-room AC Sunnyvale Cupertino and the 186-room Tetra Autograph Collection Hotel in Sunnyvale.