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9/22/21
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Hines has closed on a record setting acquisition in downtown San Francisco, purchasing Pacific Gas and Electric Company’s 1.6 msf General Office complex for $800 mil, or $500/sf. We’re told this is the largest property, by square footage, ever to sell in San Francisco.
PG&E’s San Francisco General Office complex consists of two adjacent office buildings—245 Market Street and 77 Beale Street. Listed on the National Register of Historic Places, 245 Market was completed in 1925 and stands 17 stories, totaling over 500k sf. 77 Beale Street was completed in 1971 and includes 34 stories totaling over 1 msf. The campus also includes over 400 covered parking spaces within the 50 Main Street parking structure and underground parking at 77 Beale.
The properties are located above the Embarcadero BART/Muni Station and within two blocks of the recently completed Salesforce Transit Center and the historic Ferry Building. Under PG&E’s ownership, both buildings have achieved LEED Gold and Energy Star certification.
Kyle Kovac, Mike Taquino and Giancarlo Sangiacamo of CBRE represented PG&E, who will be relocating its headquarters from San Francisco to Oakland beginning in 2022. Brad Zampa and Mike Walker of CBRE’s Debt and Structured Finance team in San Francisco arranged the $630 mil acquisition loan on behalf of Hines.
“The PG&E headquarters was heavily sought-after by the global investment community,” said Kovac. “Hines will be taking advantage of a generational opportunity to reposition an entire city block in one of San Francisco’s very best locations.”
The financing arranged on behalf of the buyer will be used to acquire the asset and finance the interim costs associated with design and permits while the new owner prepares for the asset’s renovation.
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