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Newmark Cornish & Carey Commercial Capital Markets (NewmarkC&CC Capital Markets) negotiated the sale of 500 Townsend Street, a highly sought-after infill site ideally suited for office use at the heart of San Francisco’s coveted South of Market (SoMa) district.
Dan Cressman, executive managing director, and Managing Directors Mike Taquino and Kyle Kovac marketed the property and negotiated the transaction for the seller. The purchase price was undisclosed.
The 1.23-acre site in the 500 block of Townsend Street, just west of the I-280 exit at Sixth Street, is zoned to allow as much as 300,000 square feet of commercial space. The property offers a unique development opportunity in one of the nation’s top-performing office submarkets, and at a time when a dozen or more companies are on the hunt for large blocks of space there.
“There’s an insatiable demand for large office space occurring right now in San Francisco, and that generated a degree of competition to buy this site at 500 Townsend,” said Mr. Cressman. “Six companies have already taken out office blocks of 100,000 square feet or more since the first of the year, and there are two or three times that many still searching the market for a spot to call home.”
500 Townsend gives the new owner a high-profile site alongside technology leaders including Salesforce, Dropbox, Adobe, Amazon.com and Pinterest, which are just a few of SoMa’s big-name resident firms.
“The top technology employers from around the globe have determined that SoMa is the place they need to be, and this is one of the few sites where one of those companies will have the opportunity to establish its presence here with new construction and the latest office concepts,” Mr. Cressman said.
The pace of leasing for large office spaces is accelerating in San Francisco. Recent examples include Salesforce.com, which has leased more than 700,000 square feet in the planned Transbay Tower; and Dropbox, which has committed to lease a 298,000-square-foot office building to be developed in the 300 block of Brannan Street, a few blocks away from 500 Townsend. Last month Trulia Inc. leased almost 80,000 square feet of an office tower under construction at 535 Mission St., and other firms have inked similar deals, many at buildings still under construction.
The NewmarkC&CC Capital Markets team originally sold the 333 Brannan Street parcel to Kilroy Realty Corp., and its partner Cornish & Carey Commercial Newmark represented Breevast, the adjacent owner at 345 Brannan Street, in its lease to Dropbox for the future development of its headquarters at the sites.
The unentitled 500 Townsend Street offers 50,000 square feet of commercial space in four existing structures. Because the project falls under the Western SoMa Community Plan, which includes a comprehensive environmental impact report, the buyer will have a running start in pursuing entitlements.
“Recent zoning in the West SoMa plan established parameters that will allow a developer to begin their entitlement process immediately and capitalize on the tremendous tenant demand in this cycle,” said Mr. Taquino.
The property’s amenity-rich location serves as a gateway to Mission Bay, Potrero Hill and the Mission District, and includes convenient access to thousands of newly constructed or proposed residential units, restaurants, and AT&T Park. San Francisco’s main Caltrain Station at 4th and Townsend Streets is two blocks to the east, serving approximately 50,000 daily passengers to and from SoMa and the Silicon Valley.
About Cornish & Carey Commercial Newmark
A dominant regional real estate force since 1935, Cornish & Carey Commercial Newmark (C&CCNewmark) has an expansive reach as part of one of the largest commercial real estate service firms in the U.S. Regionally, C&CCNewmark has more than 310 agents in 13 strategically located offices throughout Northern California, creating a powerful platform from which to deliver superior services locally, while upholding its core values of integrity and knowledge. For further information, visit www.ccareynkf.com.
About Newmark Grubb Knight Frank
Newmark Grubb Knight Frank is one of the world’s leading commercial real estate advisory firms. Together with London-based partner Knight Frank and independently-owned offices, NGKF’s 12,000 professionals operate from more than 320 offices in established and emerging property markets on five continents.
With roots dating back to 1929, NGKF’s strong foundation makes it one of the most trusted names in commercial real estate. NGKF’s full-service platform comprises BGC’s real estate services segment, offering commercial real estate tenants, landlords, investors and developers a wide range of services including leasing; capital markets services, including investment sales, debt placement, appraisal, and valuation services; commercial mortgage brokerage services; as well as corporate advisory services, consulting, project and development management, and property and corporate facilities management services. For further information, visit www.ngkf.com.
NGKF is a part of BGC Partners, Inc. (NASDAQ: BGCP), a leading global brokerage company primarily servicing the wholesale financial and real estate markets. For further information, visit www.bgcpartners.com.