114 SANSOME STREET
Location North Financial District, San Francisco
Property Type Class A Historic Office
Square Feet 190,000
Equity Bayview Financial
Acquisition Date December, 2005

Opportunity // Principals of Sansome Street Advisors sourced an off market opportunity to purchase a well renovated 190,000 square foot building located in San Francisco’s North Financial District.  The building, originally constructed in 1908 and expanded in 1928, had received a $15 million upgrade in 2000.  SSA’s team developed a plan to capitalize on the significant near term rollover and discounted in place rents by implementing a lease buyout plan with the majority of tenants.  The plan enabled the resale of the property with a 40% increase in pro forma net income after vacating 48% of the office tenants.

Transaction // SSA advised Bayview in the acquisition of 114 Sansome from Spear Street Capital who had purchased the building in 2003 as a distressed sale.  Because of SSA’s prior knowledge of the property and relationship with the seller, the acquisition was able to be transacted as an off market purchase without competitive bidding. 

Results // Sansome Street Advisors initiated the discussions with building tenants to terminate in February, 2006 and concurrently gut 25% of the floors which had not been renovated in 2000.  The property was packaged for marketing as an institutional grade offering in January, 2007 and upon closing resulted in a realized IRR of 37.6%.  SSA continues to lease the property and has maintained an average occupancy of 96% through April, 2012.