This Week's Bay Area Deal Sheet
In another indication that investors are in the market for downtown San Francisco office buildings at discounted prices, local investor Redco Development and GCI General Contractors are reportedly under contract to buy 300 California St. for $28M, or $240 per SF. New York-based LeFrak, a privately held company, is the seller.
If the deal closes under the existing terms, the San Francisco Business Times reported it would be a steep discount from the last time the property sold, in late 2014. The asset is expected to command slightly less than half its former value of $58.25M, or $485 per SF.
Locally based Redco is one of the many opportunistic investors setting its sights on downtown S.F. In December, Redco partnered with Tonic Nightlife Group and the Harrington family to reopen Harrington’s Bar & Grill at 246 Front St., saving the oldest operating Irish pub in San Francisco’s downtown core from going out of business. According to Redco’s website, Leo Harrington founded the Irish pub in 1935.
SALES
Two out-of-state companies have invested in one of the submarkets hardest hit by the pandemic, South of Market. New York Life Real Estate Investors and Bridgeton acquired 410 Townsend St., a 78K SF office building.
Mike Taquino and Kyle Kovac on CBRE’s capital markets team represented the buyers.
“We’re excited to invest in 410 Townsend in collaboration with Bridgeton. It’s our opinion that this is the start of the recovery for the San Francisco real estate market,” New York Life Senior Director of Transactions Albert Pura said in a press release.
New York Life said the four-story property will appeal to tech tenants.
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Semiconductor company GSI Technology Inc. has agreed to a sale-leaseback of its 44K SF industrial and office space at 1213 Elko Drive in Sunnyvale. D.R. Stephens & Co. is the buyer.
GSI will lease back the entire property for an initial term of 10 years, with two five-year options. The base rent is approximately $90K per month, with a 3% annual increase starting from the first anniversary of the closing date.
FINANCING
Gantry secured a $7.2M construction-to-permanent loan for a build-to-suit project for Auteur Wines, a Northern California winery. Upon completion, the property will include a production winery, tasting room and vineyard on 8.2 acres at 10520 Wohler Road in Healdsburg.
LEASING
In what is being dubbed the second-largest lease in Silicon Valley so far this year, PwC agreed to take 141K SF at One Santana West in San Jose. Bethesda, Maryland-based Federal Realty Investment Trust is the property owner. With the signing, One Santana Row is nearly 50% occupied.
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In other Silicon Valley news, Concept Therapeutics entered into a sublease agreement for approximately 51K SF at 101 Redwood Shores Parkway in Redwood City. Software company Zuora is the primary tenant. According to regulatory filings, the sublease will commence July 1 at an average base rent of $1.4M annually.
PEOPLE
Walgreens’ former head of real estate Joe Brady has joined LRG Investors of Walnut Creek as a partner. In his new position at LRG, Brady is charged with expanding the firm’s portfolio and leading its national growth strategy.
“We’ve been around the industry for decades and what we can do really well is help brands accelerate their growth and help them optimize their portfolios,” Brady told Bisnow in an interview.
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Affordable housing developer MidPen Housing promoted Ann Goggins Gregory to chief operating officer. She joined the company in August 2019 as senior vice president of MidPen Services, an affiliate of the affordable housing developer. Before that, Goggins was a senior adviser to Habitat for Humanity International.
