The Portfolio Everyone's Talking About
Three downtown buildings within blocks of one other have seen a feeding frenzy from hungry investors since they were put up for sale six weeks ago. Now values are going for well beyond whisper pricing, we hear. (We heard it because it's risen to loud, yelling-in-the-library pricing.)
The three buildings—188 The Embarcadero (pictured); 60 Spear; and 201 Cal—are being sold by USAA and Ares, and market sources say the shops have already accepted second-round offers on their respective deals and pricing is going berserk. (They make checks blank for a reason, folks.) There's a ton of interest for each deal, they say; in addition to the stellar addresses, the types of tenants inside are likely driving up price tags. We recently wrote about Sand Hill Road VC titan GI Partners making a second home in 188 Embarcadero, while France Telecom and Rodan + Fields inhabit 60 Spear.
Some of the top brokers in the biz were tapped to sell each; HFF is handling the 60 deal, Cushman's got 188, and Eastdil is doing 201. (We got no comment across the board, and ownership did not return a call requesting comment.) We do know the portfolio has had quite the hot potato experience. We all hate to remember the year 2009, when Morgan Stanley relinquished five of the nine S.F. properties it scooped up for a record-setting amount in 2007 from The Blackstone Group. (Three of those five are the buildings now for sale.) The mez lender was AREA Property Partners, which was bought by Ares last year. It's unclear when USAA got into the portfolio. Based on apparent competition so far the new owners likely have hefty wallets. (A little lighter now though.)