166 GEARY STREET & 171-175 MAIDEN LANE Location Union Square, San Francisco
Property Type Retail
Square Feet 48,000
Equity Parkwood Real Estate Partners / NUP
Acquisition Date January, 2008
Purchase Price $23,000,000

Opportunity // Sansome Street Advisors uncovered an off-market opportunity to purchase an underperforming Union Square retail property.  The 16 story trophy asset was leased to five boutique retail tenants on the first two levels and 48 tenants on the upper floors with a salon industry concentration. All tenants were determined to be a discount to potential rent. 

Transaction // SSA began an aggressive leasing campaign in 2008 to maximize the operating income of the asset.  Instead of viewing the salon industry tenants as a negative due to higher than average utility expenses and stress on building systems, we determined the captive tenant base was a strategic asset and increased their rent and percentage share of occupancy while incurring less than $3 per square foot on average for improvement costs.  The leasing campaign reached a new high in early 2011 after securing Jimmy Choo as a new ground floor tenant on Geary Street between the neighboring Channel and Bulgari stores.

Results // Notwithstanding the global economic crisis and challenges of 2008-2010, SSA was able to execute 31 new and renewal leases increasing the net income from $1.4 million in 2008 to a projected $1.95 million in 2011 while maintaining occupancy levels in excess of 93% even as vacancy in the City reached 20%.  SSA brokered the sale of the property in March, 2012 for $34MM.