(EDITOR’S NOTE: According to sources familiar with the transaction, the price paid was $307 million or $689 per square foot.)
NEW YORK, NY – September 14, 2015 – TIAA-CREF, a leading U.S. financial services organization and the nation’s largest manager of U.S. institutional tax-exempt real estate assets*, today announced the acquisition of a prime real estate asset in San Francisco as part of its joint venture with partner Norges Bank Investment Management, manager of the Norwegian Government Pension Fund Global.[contextly_sidebar id=”IlPSN0cmdMEksmsvQduQApMsRNSGbmpD”]Located at 888 Brannan Street, the property is a 445,000 square foot Class A office building in San Francisco’s South of Market submarket. Norges Bank Investment Management has acquired a 49.9% stake while TIAA-CREF will own a 50.1% interest and manage the property on behalf of the partnership.
The five-story building was constructed in 1918 and was a former gift center and jewelry mart that underwent a $70 million renovation and now serves as Airbnb’s corporate headquarters. The surrounding neighborhood and redeveloped office buildings have been heavily sought after by technology and creative tenants due to the appeal of large floor plates and creative build-outs, as well as proximity to BART, MUNI and Caltrain, the latter of which connects San Francisco to Silicon Valley.
“San Francisco is an exciting and dynamic market and this investment makes sense on a number of levels. The city has a high occupancy rate for office properties and this submarket is attractive to tenants looking for modern, redeveloped space at a competitive cost to new construction,” said Suzan Amato, Managing Director of Managed Accounts for TIAA-CREF. “The location offers easy access for walkers, bikers and public transportation riders alike and is close to restaurants and amenities in the surrounding neighborhoods.“
“888 Brannan’s large floor plates ranging from 60,000 to 100,000 square feet are highly desirable in the market,” according to Richard Kimble, Head of Western Region Acquisitions for TIAA-CREF. “Office buildings in San Francisco with floor plates greater than 50,000 square feet are currently over 98% leased on average.”
TIAA-CREF (www.tiaa-cref.org) is a national financial services organization with $869 billion in assets under management (as of 6/30/2015) and is the leading provider of retirement services in the academic, research, medical and cultural fields.
About TIAA-CREF Global Real Estate
TIAA-CREF Global Real Estate is the real estate investment and management business of TIAA-CREF. As the nation’s largest manager of U.S. institutional tax-exempt real estate assets* with approximately $58 billion in assets under management, investment vehicles include directly owned properties, joint ventures, mortgages, REITs and funds. The platform has a global presence via the formation of London-based real estate asset management firm TIAA Henderson Real Estate (TH Real Estate), which has $28 billion in assets under management across 50 funds and mandates, bringing the combined worldwide assets under management for TIAA-CREF Global Real Estate and TH Real Estate to over $86 billion (as of 6/30/2015).
TIAA-CREF Individual & Institutional Services, LLC, Teachers Personal Investors Services, Inc., and Nuveen Securities, LLC, Members FINRA and SIPC, distribute securities products. C25396
© 2015 Teachers Insurance and Annuity Association of America-College Retirement Equities Fund (TIAA-CREF), 730 Third Avenue, New York, NY 10017
*According to Pensions & Investments, Real Estate Managers ranking, October 27, 2014
About Norges Bank Investment Management
Norges Bank Investment Management is the asset management division of Norges Bank, the Norwegian central bank. As manager of the Government Pension Fund Global, its mission is to safeguard and build financial wealth for future generations in Norway. Norges Bank Investment Management aims for the highest possible long-term return within the investment mandate set by the Ministry of Finance. The fund is invested globally in equity, fixed income and real estate markets and had assets worth 6,897 billion kroner, or about $877 billion, as of 30 June 2015.