W3 Partners, an institutional real estate investment manager, has completed a recapitalization of 543 Howard St., a 5-story, 72,000 square foot office building and an adjacent 4,000 square foot parking lot in the South of Market (SOMA) district. The building, which was originally built in 1923 as a 2-story warehouse, was substantially redeveloped by its owner, Erik Robbins in 2003-4, with the addition of two stories, plus a mezzanine. The building is located directly across the street from the new Transbay Terminal Center and features a rooftop deck offering sweeping views of downtown San Francisco and SOMA. 543 Howard Street is widely considered one of the best-in-class renovated brick and timber buildings in SOMA. The building has attracted high tech and creative users, as well as established professional service firms, due to its high end interior finishes, operable windows and exposed wood ceilings and beams. The building is 91% leased by six tenants with rents that are significantly below current market rents.
The building is located on the south side of Howard St., between 1st and 2nd Streets. The property’s SOMA location is one of its greatest strengths, as it provides access to the city’s transportation networks and is near numerous restaurants and retail amenities. The SOMA district has achieved one of the lowest vacancy rates in San Francisco; CAC Group reports an 8.3% total vacancy rate as of Q4 2011.
“The recapitalization by W3 highlights one of our company’s key strategies to invest in multiple types of deal structures in markets with great employment fundamentals.” said Gary Wong, Principal at W3 Partners.
This is W3’s third close over the last twelve months in W3’s Value Add Fund 1. W3 Partners was founded in 2009 and formed a strategic joint venture with Dallas-based, Akard Street Partners, L.P., an investment partnership operated by Hunt Realty Investments, Inc. Akard Street Partners is a partnership created by Hunt Realty and the Teacher Retirement System of Texas to invest capital, in selected commercial real estate operating companies across the United States. “W3’s investment strategy of executing transactions across all structure types, from fee interests, to debt and recap capital, is integral to delivering the best risk adjusted returns to investors,” said Diane Olmstead, Managing Partner at W3. “We like providing equity for recapitalization of assets, real estate partnerships and operating companies and plan to do more of it in the coming year.”
About W3 Partners
W3 Partners (www.W3partnersllc.com) is a privately-held, women and minority owned investment management firm that combines the best attributes of a real estate operating company with those of an investment fiduciary. W3 focuses on making investments in office and office/R&D assets with value added or repositioning potential in strategic locations in the San Francisco Bay Area, Southern California and Pacific Northwest.
About Hunt Realty Investments
Hunt Realty Investments, Inc., (www.huntrealty.com) serves as the centralized real estate investment management company for Hunt Consolidated, Inc., which is part of the Hunt family of companies directed by Ray L. Hunt. Hunt Realty has been active in acquisition, ownership and investment in the real estate industry for more than 30 years and works to identify and invest in unique opportunities that differentiate themselves from the typical commodity investments available in all markets. Hunt Realty seeks investments that may have a higher level of risk, but also the potential for commensurate high performance. For more information on Hunt Realty Investments or Akard Street Partners, contact Clyde Robinson, Senior Vice President & Director of Capital Strategies, by email firstname.lastname@example.org or by phone 703.761.7085.
About Teacher Retirement System of Texas
The Teacher Retirement System of Texas delivers retirement and related benefits authorized by the Texas Legislature, and manages the $95.2 billion trust fund established to finance member benefits. Nearly 1.3 million public education and higher education employees and retirees participate in the system.
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