SAN FRANCISCO—A partnership of Hines and Invesco Real Estate has purchased the Rialto Building for a reported $57 million from Africa Israel USA.
Located at the intersection of Mission and New Montgomery streets, the building is in the heart of the South Financial District, one block from both BART and the Transbay Terminal Redevelopment. Hines will oversee management and leasing of the property on behalf of the partnership. The sale was completed only six weeks after the sellers placed the property on the market. In total, 17 offers were submitted as part of the bidding process. Eastdil Secured represented the seller in the transaction.
Built in 1902, the H-shaped Renaissance-style building was designed by Meyer & O’Brien Architects. The nine-story building contains 135,486 sq. ft. of office and retail space. After the great earthquake of 1906, the building’s interiors were completely rebuilt, leaving the steel, brick and concrete exterior structure intact. Africa Israel acquired the building in 2007, and soon after, undertook a capitalprogram to restore the property to its original grandeur. Restoration work focused on original architectural components in the main lobby, including the bronze staircase, ornate metal elevator doors, the painted panel ceiling and the marble flooring.
The building is currently 85 percent leased to strong tenant roster including office tenants Trulia, Nelson\Nygaard and LaunchSquad, and retail tenants Walgreens and Chipotle.
Hines Senior Managing Director Cameron Falconer says in a statement that the Rialto is one of San Francisco’s true architectural icons. “We are pleased to add it to our portfolio,” he says. “Going forward, Hines and Invesco will continue to invest in the building to complete its transition to a ‘creative core’ asset that caters to San Francisco’s burgeoning technology and multimedia industry tenants.”
Tamir Kazaz, CEO of Africa Israel, says in the statement that the sale proves that San Francisco is still unmatched as the nation’s top-performing office market. “The combination of historic, creative layouts and central location make this a highly attractive property, one that will ensure long-term value and stable cash flows,” he says.