Spanish investor buys S.F. complex for $475m
Ponte Gadea, a real estate arm of Spanish investor Amancio Ortega, has acquired the Pacific Place building, located in San Francisco, for $475 million, according to a Spain-based media outlet.
The seller was J.P. Morgan Asset Management, which acquired it in 2014.
The 436,000-square-foot property at 12 & 22 Fourth Street in the Union Square neighborhood comprises a 192-room hotel, 202,000 square feet of office space and 129,000 square feet of retail space.
During 2016 Ponte Gadea acquired the Tiffany Building at 360 Post St. in Union Square for $133 million. The seller was a partnership including Greenstone Realty Advisors.
The San Francisco office property market remains one of the most sought-after markets both nationally and internationally. Investment sales volume during the first half of 2017 is comparable to the investment sales activity seen this time last year with year-to-date sales volume of nearly $2.2 billion and 19 closed investment sales, according to Colliers International.
Financial District office sales dominated the first quarter of 2017 accounting for 61 percent of all sales in comparison with second quarter sales activity spread more evenly across the city. The largest deal this year, 44 Montgomery St., closed in April to Beacon Capital Partners for more than $475 million ($690 per square foot). An additional significant investment sale was 1660–1680 Mission St. to SF Prosperity 2 for $52 million ($464 per square foot). The second half of 2017 is forecasted to be strong with additional class A and class B office assets coming to market. A renewed midyear investment outlook should help San Francisco achieve total investment volume in-line with recent years.
A total of 5.1 million square feet was under construction at the end of the second quarter, with 2.3 million square feet of new construction scheduled to deliver in 2017 at Salesforce Tower, 181 Fremont St., and 350 Bush St., according to Cushman & Wakefield. At the close of the quarter, 1.3 million square feet (55.1 percent) of this inventory was pre-leased.