By Meghan Hall
The Jackson Square neighborhood has seen several properties come up for sale in recent months, and increasing numbers of investors are looking to Jackson Square as numerous venture capital and tech companies have decided upon the district as their neighborhood of choice. 900 Sansome, a three-level parking garage located in Jackson Square, has recently hit the market. Newmark Knight Frank did not disclose guidance pricing, stating that the property was hitting the market unpriced.
“We’ve seen a tremendous amount of demand in Jackson Square; it’s really become a premier destination for venture capital companies,” explained Mark Geisreiter, executive managing director at Newmark Knight Frank. “We’ve seen a real influx and that’s being driven by a tightness of the market in SoMa, the attractiveness of Jackson Square with the building types, the quality of the architecture, and the restaurant and retail scene.”
Geisreiter, along with NKF Capital Markets Senior Managing Director Seth McKinnon and Associate Director Nadav Kariv are representing the seller in the transaction.
Built in 1927, the garage totals 29,349 square feet; the first floor is the smallest, at 6,425 square feet and the upper two floors are each 11,462 square feet. A potential investor could convert the garage into office space and would also be able to add an additional 19,614 square feet on top of the existing structure for a total of 48,963 square feet under the Prop m Small Allocation. Third and fourth floor additions would each total about 9,807 square feet. The property has an abundance of natural light, steel-sash industrial windows on three sides 19-foot ceiling heights and exposed concrete walls.
“You’ve got a really interesting opportunity in a really strong submarket. There’s a lot of value-add capital that’s been raised, and not a lot of value-add projects on the market,” said Geisreiter. “So it is a pretty rare opportunity.”
Currently, the site is 100 percent leased to a parking garage operator, whose lease does not expire until the end of July, 2021, giving a potential investor cash flow while pursuing entitlements, according to an offering document circulated by brokerage firm Newmark Knight Frank. In recent years, the Jackson Square submarket has become rapidly desirable; venture capital, tech and private equity firms within the neighborhood are some of the most innovative and fastest growing companies in the city. Newmark Knight Frank will be calling for offers on November 21st.
The neighborhood is also home to numerous boutique brands such as Allbirds, Isabel Marant, Aesop, and Filson; restaurants such as Quince and Cotogna are also nearby.
As VC firms have set up shop in Jackson Square, the neighborhood has earned the nickname “The New Sand Hill Road,” in reference to Menlo Park’s hub of tech investment. As a result, the direct vacancy rate in Jackson Square has decreased to just about 0.5 percent, down from just over 3 percent during the second quarter of 2018 and 6.5 percent from the second quarter of 2015. As a result, asking rates are well over $90 per square foot, with Class A rents coming in at $100.58 per square foot, full service gross.
Other properties that have recently sold in Jackson Square include 900 Kearny and 450 Pacific; both purchased from San Francisco investment firm Brick & Timber Collective. 450 Pacific was sold by law firm Keesal, Young and Logan for $31.7 million, or about $1,109 per square foot. The 30,000 square foot 900 Pacific traded for $27 million, or about $900 per square foot. In November of 2018, a private buyer snapped up 244 Jackson Street for $33 million, or about $1,100 per square foot, after acquiring the property from William B. Baner of Parkfront Investment.