July 28, 2020 9:00 AM
Newmark Knight Frank (“NKF”) has completed the $140 million sale of The Townsend Building located at 123 Townsend Street in San Francisco. The six-story brick and timber office building, which is anchored by PayPal, is currently 100 percent leased and provides walking access to a dense retail amenity base and Caltrain.
Chairman and Head of Capital Markets for Northern California Steven Golubchik, Vice Chairman Edmund Najera, Managing Director Jonathan Schaefler, and Associate Director Darren Hollak represented the seller, Manchester Capital in the transaction. The buyer was CBRE Global Investors.
“The property’s long-term cash flow secured by an investment grade tenant appealed to investor’s flight-to-quality mindset in the midst of the COVID-19 pandemic,” said NKF’s Golubchik.
The office building offers 137,624 square feet of creative tenant space, a 6,000-square-foot fitness center with showers, on-site storage and parking, as well as a rooftop deck with sweeping views of the San Francisco Bay, Downtown skyline and Oracle Park.
The Townsend Building, prominently located along Townsend and King Street, presents immediate access to numerous retail amenities and entertainment options including the adjacent Oracle Park, home to the San Francisco Giants. The highly transit-oriented property is less than a 5-minute walk from the San Francisco Caltrain Station and a 7-minute drive from the 280 freeway, providing access to the San Francisco Peninsula and Silicon Valley.
The South of Market (“SoMa”) office market encompasses over 18 million square feet, with 9.2 million square feet making up Class A product. Driven by over 3 million square feet of positive net absorption since 2013, the SoMa Class A office vacancy rate currently stands at 2.4 percent, decreasing 198 bps since 2016 and claiming the second lowest rate in San Francisco, according to NKF Research. Benefiting from the tightening market and sustained tenant demand, class A asking rates sustained a 6 percent compound annual growth rate since 2014 and now stands at $87.05 FSG, the highest level ever recorded.
Newmark Knight Frank
Newmark Knight Frank (“NKF”), operated by Newmark Group, Inc. (“Newmark Group”) (NASDAQ: NMRK), is one of the world’s leading and most trusted commercial real estate advisory firms, offering a complete suite of services and products for both owners and occupiers. Together with London-based partner Knight Frank and independently owned offices, NKF’s 18,000 professionals operate from approximately 480 offices on six continents. NKF’s investor/owner services and products include investment sales, agency leasing, property management, valuation and advisory, diligence, underwriting, government-sponsored enterprise lending, loan servicing, debt and structured finance and loan sales. Occupier services and products include tenant representation, real estate management technology systems, workplace and occupancy strategy, global corporate services consulting, project management, lease administration and facilities management. For further information, visit www.ngkf.com.
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