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7/01/16
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Blackstone has acquired Market Center, a two-building, 753k sf office complex in San Francisco. The property was purchased from John Hancock Real Estate, the U.S. division of Manulife Financial Corporation. Although the price was not disclosed, industry pros expect the deal to have a price tag near $490 mil.
Located at 555 and 575 Market St in the heart of the city’s downtown, Market Center is a vibrant urban office campus that was 93% leased at the time of sale. Tenants at Market Center include Uber, TIBCO Software, PNC Bank, Bank of San Francisco, and a broad mix of companies in the professional services, technology, business, and government sectors.
Market Center will soon also serve as the Northern California regional headquarters for Equity Office. Equity is a wholly-owned affiliate of Blackstone Real Estate Partners.
“Beyond the strength of the tenant base in Market Center, the project’s timeless architecture, excellent views, irreplaceable central location and close proximity to public transportation were all positive factors affecting the acquisition”, said Frank Campbell, Managing Director, Western Region for Equity Office.
Market Center is directly in front of a BART station and is one block from Transbay Transit Center, the impending transportation hub for San Francisco. The project also features an expansive open plaza between the two buildings, an amenity that will undergo upgrades as Equity Office improves the tenant experience at Market Center.
Equity Office will lead the ownership team as it embarks on significant improvements to the physical elements and service offerings of the property. Early plans include renovations to common areas and collaborative spaces, new retail services, advanced fitness and wellness offerings, improved energy efficiency and sustainability, branding, and way-finding. A focal point of the upgrades will include new tenant suites ideally suited for creative workspace designs.
The seller was represented by Eastdil Secured, while Blackstone was self-represented in the transaction. CBRE’s Bill Cumbelich, Tom Poggi and Alexis Walsh will continue to handle leasing for the building.
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