Rubicon targets SF, Seattle office space with $230M fund

Rubicon Point Partners has high hopes for a pair of distressed, remote-friendly office markets.

The real estate investment firm has closed its new Rubicon First Ascent fund to acquire office space throughout San Francisco and Seattle, riding on confidence that office workers will soon reoccupy their spaces.

The $232 million fund will target up to $770 million in office building acquisitions across the Bay Area as well as Puget Sound in Washington, Rubicon announced on Wednesday. The firm is hoping to make between eight and 12 purchases.

“We fundamentally do not believe that people will never return to the office space,” co-managing partner Ani Vartarian told The Real Deal, adding the firm was “bullish” on the Bay Area and Seattle, two areas where the office sector was hit hard by the pandemic.

Office vacancy levels in San Francisco hit 18.7 percent in the first quarter of this year. But Vartarian said tours are back — the first step in signing tenants to leases. Office occupancy in Seattle, meanwhile, remains nearly 40 percent below its 2018-2019 average, according to a recent report from VTS.

Other major players are also betting on a Bay Area office comeback. Vornado Realty Trust recently completed a $1.2 billion refinancing of its 555 California St. office tower it co-owns with former President Donald Trump.

Rubicon’s new fund pools cash from larger institutional investors, including the University of Michigan’s endowment and the Pennsylvania State Employees Retirement System. Previously, the firm had worked with Canyon Partners on a California Public Employees’ Retirement System partnership and has managed funds for the Kaiser Family Foundation.

Founded in 2010 by Vartanian and co-managing partner Razmig Boladian, Rubicon has acquired 21 properties to date, valued at a total of $580 million.

In April, Rubicon sold a two-building office campus in San Mateo in April for $156 million to Longfellow Real Estate.