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7/02/25
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A $101.6 mil loan secured by 353 Sacramento Street, a 284.8k sf, 23-story, Class A office tower located in San Francisco’s North Financial District, has changed hands in a transaction said to be worth about $62 mil. The high-rise is currently just 33% leased.
The asset was acquired by New York Life Real Estate Investors and Lincoln Property Co. It was sold by Aareal Bank of Germany, who took control after the building’s previous owner, Pacific Oak Strategic Opportunity REIT, gave up the property prior to a possible foreclosure.
Pacific Oak purchased the building in 2016 for $169.5 mil and then invested $41 mil in improvements. These included a new lobby, renovated restrooms, upgraded elevators, and tenant improvement work on nearly 70% of the building.
Steven Golubchik, Edmund Najera, Darren Hollak, Francesca Zappula and Brendan Raney with Newmark represented both parties in the transaction. Newmark’s Adam Spies, Adam Doneger, Christopher Kramer and Brock Cannon provided support on the transaction.
“This was a rare opportunity to acquire a loan secured by a revitalized office tower in one of the most recognizable business corridors on the West Coast,” said Golubchik. “This offering drew considerable attention from all investor profiles, including high-net-worth individuals, core-plus office capital, closed-ended funds and hedge funds.”
Total leasing activity in San Francisco in the first quarter of 2025 was at the highest level since 2019, and preliminary data shows that second quarter leasing activity will be even greater, according to Newmark Research. Office availability has been trending down since reaching a peak in early 2024. Newmark is currently tracking over 7.6 msf of office demand, the market’s highest level since 2019. Nearly 3.8 msf of this demand is from tech tenants, bolstered by AI sector expansion and improved sentiment toward the city’s office market.
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