When New York Life Real Estate placed the nearly 118,000 square foot 250 Montgomery Street office building in San Francisco on the market in June, it was hoping the timing would be ripe for the sale and looking to fetch as much as $600 per square foot.
The Registry has learned from public documents that the sale of the building closed on September 1st for $74,750,000 or $630 per square foot. The buyer was Boston-based TA Associates, which also has offices in Menlo Park.
New York Life had owned the building since 2011 when it purchased the asset for $37 million, or $311 per square foot. The property is 86 percent leased to a diverse group of office and retail tenants, which provides a healthy cash flow scenario for the new owner, according to Cushman & Wakefield, who helped sell the building on behalf of the New York insurance company. One of the anchor tenants in the building is CrossFit gym, where it has its flagship location. Plant Cafe is scheduled to open in the building this month.
The building, which was built in 1986, is part of the north financial district of San Francisco. It is at the corner of Pine and Montgomery streets, less than three blocks from Market Street and Montgomery Street BART stations. The office building was formerly developed and owned by the San Francisco-based Lembi Family.
Overall office vacancy in San Francisco has shrunk to 6 percent, according to a third quarter 2015 market report by Cushman & Wakefield, with an average asking rent climbing to $66.71 per square foot. The vacancy in the north financial district is a little higher at 7.1 percent, which represents the second highest submarket vacancy in the city, according to the same report. Another significant sale in the north financial district was the sale of the 132,992 square foot 450 Sansome Street building, which sold for $89 million or $669 per square foot. The buyer was LaSalle Investment Management, and the seller was Cornerstone Real Estate Advisors.
The 250 Montgomery Street building was sold by a lender in late 2009 for around $175 per square foot to Tulsa, Oklahoma-based Argonaut Private Equity Group. This company then sold the asset to McMorgan & Co., which is now controlled by New York Life.
The Registry had reported that New York Life was listing the building for sale earlier in June. The listing was managed by Seth Siegel, Grant Lammersen, Adam Lasoff and George Eckard of Cushman & Wakefield.