November 15, 2019
Activity remains hot in San Francisco’s central SOMA (South of Market) district as developers target the area for new opportunity. Buyers remain on the hunt for opportunities to reap the benefits, snapping up properties as they hit the market. Barry Bram, Principal of TRI Commercial/CORFAC International, recently represented sellers of two unique properties in this district, 465 Tehama and 960 Howard, selling for $8.4 and $5.6 million, respectively. At 465 Tehama, TRI Principal Cal Nakanishi represented the buyer.
The two buildings sit at the heart of a burgeoning wave of development in central SOMA, just blocks from Brookfield’s proposed 5M development near Mission and 5th Street. Plans for the nearly 1.7 million-square-foot mixed-use project will include seven buildings and 60,000 square feet of open space. Proximity to this type of development activity draws interest and bodes well for building owners.
Zoned for mixed-use residential (MUR) development, the Tehama property is a fully rehabbed 8,000-SF state-of-the-art building with major upgrades to the structure/foundation, ADA life safety, electrical and plumbing systems. The buyer, Peacock Construction, will occupy the building as owner/user.
Bram offered a few words of advice for buyers interested in property undergoing significant renovation or rezoning, “Buildings in this area are few and far between, and any building with a significant footprint is fought over by interested buyers the minute it becomes available, or is even thought to be available. Zoning and use continue to be an area worth investigation prior to leaping forward, but it rarely creates an insurmountable challenge.”
Over the past five years, the price per square foot for office buildings in central SOMA has increased by more than 35% and industrial flex by 44%, respectively. Recently, Ellation, Akga and Pivotal took significant blocks of space and Nektar Therapeutics is expected to move into more than 100,000 square feet nearby.
With all the current details and potential pitfalls of zoning and owner use, Nakanishi said “the buyer of Tehama formed a team consisting of a land use attorney, San Francisco zoning consultant, architect, broker and lender to minimize unforeseen complications related to zoning and use. The negotiations were efficient and minimized delays since all team members were communicating with input.”
The Howard Street property, a longtime family-owned asset, sits on two parcels with a total footprint of 12,000 square feet, just two blocks off Market Street. Bram noted the buyer has plans to develop office and residential space. “It was a major coup for the buyer to be able to secure this purchase, with the pace of development in Central SOMA and limited investment opportunities,” he said.
About TRI Commercial/CORFAC International
Founded in 1977, TRI Commercial/CORFAC International is a leading Northern California commercial real estate brokerage and property management firm (with more than 4 million square feet of commercial property under management) specializing in San Francisco, East Bay and the Sacramento Metro property markets. The company has expertise in tenant and landlord representation services and helps clients buy and sell commercial and investment-grade property. The company serves office, retail, and land, multifamily and industrial property sectors, with offices in San Francisco, Walnut Creek, Oakland, Roseville, Sacramento, and Rocklin. For more information call Dina Gouveia in Corporate Marketing at 925.269.3305
CORFAC International is comprised of privately held entrepreneurial firms with expertise in office, industrial and retail properties, tenant and landlord representation, investment sales, multifamily, self-storage, acquisitions and dispositions, property management and corporate services. For more information on CORFAC’s International presence, call the Chicago headquarters at 224.257.4400
View the original article on The Registry here.