There have been some major, major deals surfacing and coming to fruition in San Francisco’s Financial District, a sign of the times? Perhaps… And with the spotlight back on foreign investors, I need to sharpen my mandarin and play catchup with my uncles and aunties 
Taiwanese buyers recently made an acquisition of the 126,110-square-foot 49 Stevenson St. office building signaling a return of foreign investors to this city.
Taiwan-based Pacific Resources bought it out right from a US institutional seller for $24.2 million in an all-cash deal at a price that is approximately 40% below the current assessed value of the office property, according to Grubb & Ellis who brokered the deal.
The Los Angeles-based CIM Group has been on a tear with acquiring distressed cre up here in Northern California, primarily San Francisco, Oakland and Sacramento. Most recently CIM has added the 370,000+ sq ft 211 Main st. building to their portfolio. Main st. currently occupied as Charles Schwab & Co.’s headquarters, with a locked in lease until 2018.
The building was originally developed by the famous Booth Family, part of the 3 building package including 221 Main st. and 101 Howard (all office buildings in the Financial District of SF). According to CAC, who brokered the deals, the packaged price was well below replacement costs.
CIM Group notes that the redevelopment of the Transbay Terminal (as i wrote about here) along with the luxury residences and retailers planned for the neighborhood holds the overall profile of the area and increased the potential for improved asset values.
The CIM Group’s holdings in the Bay Area include other office buildings in San Francisco and approximately 1.7 million square feet of office properties and two hotels in Oakland. It also owns 22 apartment buildings totaling 418 units in San Francisco. CIM are monsters in their own right, having embellished a $100M class A office building in down town Sacramento (470,000 sq ft). These guys are not playing, and it could be wise to be aware of where they allocate and what they acquire. Hotels are being entertained as we break into this new year.
According to Grubb & Ellis reports, the data for the fourth-quarter activity suggests that “the worst is over in San Francisco’s office market,”.
Net absorption turned positive for the first time since the third quarter of 2008. A mixed bag of news for 2010 for landlords as sublease space has seemed to stall which at one point was oversaturating the markets. But many commercial leases are set to expire this year, including big-box financials like Wells Fargo, JPMorgan, and Bank of America.