Regions West | San Francisco
Dec 26, 2007
By: Dees Stribling, Contributing Correspondent
Houston-based Hines, in partnership with RREEF's Real Estate Opportunity Fund, has acquired a two-building office complex in San Francisco's South Financial District. All together the buildings, called Hawthorne Plaza (pictured), total about 441,400 square feet.
"Real estate market fundamentals in San Francisco continue to remain strong despite the current credit crunch," Paul Paradis, Hines senior vice president, told CPN this morning. "Available supply downtown remains in check, and tenant demand remains strong. In addition to capitalizing on the current market fundamentals, Hawthorne plaza was also acquired substantially below replacement cost."
Indeed, according to Colliers International's third quarter 2007 office report for the San Francisco area, the South Financial District submarket posted 219,300 square feet of absorption during the quarter, the most of any submarket, and nearly half of the entire total absorption in the city for the quarter. Vacancies in the South Financial District dropped a full percentage point, to 7.9 percent, during 3Q07.
The partnership bought the properties for an unspecified price from TMG Partners and Farallon Capital Management. However Hines Interests, along with JV partner Sterling American, sold a San Francisco office property -- the 502,400-square-foot 405 Howard Street -- this summer to GE Capital and the Ashforth Co. for $247 million, or about $491 per square foot.
TMG Partners recently completed a multimillion-dollar capital improvements project to Hawthorne Plaza, including a seismic retrofit and exterior skin renovation on the 1980s-vintage properties. The complex is 82 percent leased, with 73 percent of the space occupied by the federal government, including the EPA’s Southwest regional headquarters, which leases about 260,000 square feet.
By: Dees Stribling, Contributing Correspondent
Houston-based Hines, in partnership with RREEF's Real Estate Opportunity Fund, has acquired a two-building office complex in San Francisco's South Financial District. All together the buildings, called Hawthorne Plaza (pictured), total about 441,400 square feet. "Real estate market fundamentals in San Francisco continue to remain strong despite the current credit crunch," Paul Paradis, Hines senior vice president, told CPN this morning. "Available supply downtown remains in check, and tenant demand remains strong. In addition to capitalizing on the current market fundamentals, Hawthorne plaza was also acquired substantially below replacement cost."
Indeed, according to Colliers International's third quarter 2007 office report for the San Francisco area, the South Financial District submarket posted 219,300 square feet of absorption during the quarter, the most of any submarket, and nearly half of the entire total absorption in the city for the quarter. Vacancies in the South Financial District dropped a full percentage point, to 7.9 percent, during 3Q07.
The partnership bought the properties for an unspecified price from TMG Partners and Farallon Capital Management. However Hines Interests, along with JV partner Sterling American, sold a San Francisco office property -- the 502,400-square-foot 405 Howard Street -- this summer to GE Capital and the Ashforth Co. for $247 million, or about $491 per square foot.
TMG Partners recently completed a multimillion-dollar capital improvements project to Hawthorne Plaza, including a seismic retrofit and exterior skin renovation on the 1980s-vintage properties. The complex is 82 percent leased, with 73 percent of the space occupied by the federal government, including the EPA’s Southwest regional headquarters, which leases about 260,000 square feet.
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