Tishman Speyer Nears Placing 160 Spear Under Contract for Estimated $197MM

By Jon Peterson

New York City-based Tishman Speyer is getting close to putting under contract the acquisition of the 295,000 square foot 160 Spear Street office building in San Francisco, according to sources aware of the transaction.

A company representative of Tishman Speyer declined to comment when contacted for this story.

160 Spear Street San Francisco real estate The RegistryThe purchase price is projected to be somewhere in the range of $670 per square foot or $197 million, as stated by sources that track the office building sales market in San Francisco.

The current owner of the property is Foster City-based SteelWave (formerly known as Legacy Partners Commercial). This is according to information placed on the company’s LinkedIn page. The listing agent on the property for sale was Eastdil Secured.

SteelWave had put the property on the market for sale in February of this year. There had been a change in the structure of ownership in the property near the end of 2014.

In December, the owner changed its ownership from a ground lease to a fee simple interest. The expectation was that this would result in the seller being able to trade the asset at a much higher rate. This could be somewhere in the range of 10 percent to 50 percent higher.

SteeleWave was planning on being able to make a significant profit on the sale. It had acquired the property in December of 2006 for $86 million or $290 per square foot. The asset was purchased from San Francisco-based Ellis Partners.

When 160 Spear was placed on the market for sale, it was 92 percent occupied. Among the tenants in the property were UC Berkeley Extension, Databricks, Workday and Mediaplex. The property was first developed in 1984.

160 Spear is setup in the South Financial District sub-market in San Francisco. This sub-market became a little tighter in the first quarter of 2015. According to data from the San Francisco office of Colliers International, the vacancy in the sub-market dropped from 7.8 percent in the final quarter of 2014 to 6.5 percent in the first quarter of the New Year. This sub-market still has 99 buildings totaling 24.8 million square feet.

The acquisition of 160 Spear would add to a significant portfolio of properties that Tishman Speyer already owns in San Francisco. According to its Web site, the company owns assets in San Francisco totaling 2.5 million square feet. It also owns 407,477 square feet in Silicon Valley and 394,122 square feet in Walnut Creek. The company does have a regional office in San Francisco located at One Bush Street.

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