The Paramount Group to Buy 111 Sutter in San Francisco for $220MM

The Paramount Group, San Francisco, JLL Income Porperty Trust, Eastdil Secured, Ellis Partners, Northwestern Mutual Life, Oglivy Public Relations, Excelsior LaSalle Property Fund

By Jon Peterson

New York City-based The Paramount Group has been selected to be the next buyer of the 275,017 square foot 111 Sutter Street office building in San Francisco. The purchase price will be $800 per square foot or $220 million, according to multiple sources familiar with the transaction. The sale of the property has not closed at this time.

The seller of the property is the Chicago-based JLL Income Property Trust. This non-traded real estate investment trust declined to comment when contacted for this story. The listing agent on the sale is the San Francisco office of Eastdil Secured.

The new owner ought to be able to add some additional value to the property in the future. This could be completed through a renovation of the building and an increase in occupancy, which is now in the low to mid 80 percent range, according to sources aware of the asset. One of the current tenants in the property is the former owner of the asset, Ellis Partners. Other tenants are Northwestern Mutual Life and Ogilvy Public Relations.

JLL Income Trust has been the 100 percent owner of the property since late 2012. The office building was valued at $110 million then, as written in a published report. The real estate investment firm had acquired an 80 percent ownership interest in the property in March 2005 for a gross purchase price of $68.4 million. This information was stated in a public document when the buyer was known as Excelsior LaSalle Property Fund. It has since changed its name to the JLL Income Property Trust.

The Paramount Group is known as a buyer of major office buildings around the United States. Its target markets are San Francisco, New York City and Washington, D.C., according to the firm’s website. The investment manager owns three other properties in San Francisco currently. These are One Market Plaza, One Front Street and 50 Beale Street.