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The Real Deal Los Angeles

Hudson Pacific pays $291M for Ferry Building site in San Francisco

Mixed-use property includes a food market and nearly 200k sf of office
By Dennis Lynch | October 08, 2018 04:00PM

Hudson Pacific Properties CEO Victor Coleman and the Ferry Building

Hudson Pacific Properties is partnering with Allianz Real Estate to pick up a historic property in San Francisco.

The joint venture is paying $291 million to acquire the Ferry Building, a mixed-use building, from EQ Office, formerly known as Equity Office. The low-rise building, on the city’s Embarcadero waterfront, has 192,500 square feet of office space, and 75,500 square feet of retail. The retail space includes the Ferry Building Marketplace, a food market built into its indoor “street,” called the Nave, which attracts 8.8 million visitors a year, according to HPP.

The sale is for a 49-year ground lease for the building. The Port of San Francisco, which is technically the owner of the building, had to sign off on the sale. HPP took a 55 percent stake and will manage day-to-day operations at the property. Germany-based Allianz will take the remaining 45 percent stake. The deal was an all-cash transaction.

The Ferry Building opened in 1898 and was named for its function as a ferry landing. It was converted into office space in the 1950s, and lost much of its historic charm in the process. It was restored in the late 1990s and reopened in the 2003. Besides the Nave, its best-known feature is its large clocktower. It’s a San Francisco Historic Landmark and is listed on the National Register of Historic Places.

Hudson Pacific Properties, a public real estate investment trust, has made some major moves in asset acquisition and development this year. It partnered with Macerich in May to redevelop the Westside Pavilion as creative office space.  It also secured a lease with Netflix for the entirety of its 13-story Epic office development in Hollywood.

In San Francisco, HPP also owns the Rincon Center, home to Google offices, and 1455 Market Street, where both ride-hailing app Uber and e-commerce app Square are headquartered.

Current office tenants at the Ferry Building include investment advisor Meritage Group LP and software companies Meltwater and Niantic. The latter is the developer of the hugely popular Pokémon GO mobile game.