Bridgeton Doubles Investment With Sale Of Mission District Office
Bridgeton Holdings made a huge profit on its recent sale of a San Francisco office in the Mission District. The company sold the 37,104 SF Pioneer Building for $34M, or $917/SF, to American Realty Advisors in an off-market transaction. The building is 100% leased to Musk Industries, a venture backed by Elon Musk.
“The Mission District is one of San Francisco’s most desirable and hip residential neighborhoods but it lacks scale of quality office supply due to zoning regulations and existing building sizes,” Newmark Knight Frank Executive Managing Director Kyle Kovac said. “This makes the Pioneer Building a rare and highly desirable acquisition opportunity.”
Bridgeton acquired the property in 2014 for $17.5M. The building was previously leased to several tech tenants. Bridgeton stabilized the property and negotiated lease expansions. When an existing tenant required a significantly larger space, Bridgeton negotiated an early termination to re-lease the building at market rent. The new lease with Musk Industry is for 10 years.
Kovac, along with Newmark Knight Frank Executive Managing Directors Michael Taquino and Daniel Cressman and Associate Director Mandy Lee, repped the seller.
According to the NKF team, San Francisco continues to be a top-performing leasing and investment market in the U.S., driven by more than 6M SF of tenant demand, which includes many venture capital-backed technology companies. Average Class-A rents are about $74/SF and vacancy remains steady at 6.1%.
“The convergence of highly liquid debt markets, record tenant demand and limited available supply to purchase, along with a high volume of both institutional and private capital that is ready to deploy, have combined to create the strongest market dynamics the city has ever experienced,” Kovac said.
