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7/09/14
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San Francisco-based Patson Companies recently closed on a San Francisco office buy, paying $72.6 mil for 1155 Market St in the city’s Mid-Market area. The 11-story, 140k sf ($518/sf) building was sold by Laurus Corporation.
Laurus, a U.S.-based private real estate investment and development firm, purchased 1155 Market for $27 mil in 2011 essentially empty, as the lone tenant at the time was vacating the asset. Laurus was able to quickly re-lease more than 75% of the building for a 10-year term to the City and County of San Francisco and implement tenant improvement renovations in just 90 days.
In addition, Laurus executed a $14 mil renovation of the building, including the façade, lobby, corridors, bathrooms, elevators, common areas and overall MAP systems toward LEED Gold certification and Ashrae compliance. Laurus realized over 56% Internal Rate of Return for investors from the recent sale.
“When we acquired 1155 Market St., the San Francisco mid-market location was in the early stages of revitalization. We were able to capitalize on the momentum, executing a focused business plan and aggressively pursuing targeted goals, efforts that ended up achieving over three times (3x) equity multiple for our investors”, said Philip Cyburt, Chief Executive Officer of Laurus Corporation.
Most of the proceeds from the transaction will be rolled into Laurus’ real estate fund, the Ethika Diversified Opportunity Real Estate Fund, which was formed to provide investors access to a unique platform that tactically invests in opportunistic and value-add assets in the United States.
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