Invesco Buys 388 KSF San Francisco Office Tower from Hines

Source:  CPE

Invesco Real Estate has purchased the 24-story, 388,370-square-foot Class A office tower at 101 Second St. in San Francisco’s SoMa district from Hines, the latter’s San Francisco office announced Friday. The closing took place on Jan. 7, a Hines spokesperson told Commercial Property Executive. Financial terms of the sale were not disclosed.

The building is 90 percent leased, and its major tenants include law firms Clyde & Co. and Reed Smith and public accounting firm Moss Adams.

Hines was advised by CBRE on this latest transaction. The seller had previously bought the building from Cousins Properties, of Atlanta, in 2004.

“This was the ideal time from a capital markets perspective to monetize the value created for our investors,” Ken Jett, managing director in Hines’ Core Fund, told CPE.

“The South Financial District has improved significantly over the past 10 years, and I expect that it will continue to improve for the new owners of the building,” George Clever, senior managing director in Hines’ West Region, said in a release.

“101 Second St. is a strong addition to our national portfolio. The property’s location, quality and leasing status are an ideal fit with our long-term investment approach,” Bill Grubbs, managing director of Invesco Real Estate, also said in the release.

Designed by Skidmore, Owings & Merrill, the building was completed in 2000. Its design features a highly articulated steel frame, a façade of Spanish limestone and light-green glass, and a four-story aluminum-and-glass art pavilion. 101 Second St. achieved LEED Gold certification in 2009.

“After a frenzied investment climate during the past couple of years, the market is entering a period with a balanced number of buyers and sellers,” according to a Thirs Quarter San Francisco market overview from Marcus & Millichap.

“Owners who purchased during the downturn are profit-taking after a significant gain in the value of their assets, while others are divesting to reallocate capital into markets with more potential upside,” the report continues. “Plenty of investors are present to purchase assets, though value-add plays will dominate buyer motivation in the coming year.”

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