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Ellis Partners acquires 179K sf office building in South of Market neighborhood
Deal highlights desirability of core office properties in San Francisco even as city’s tech companies allow most employees to work remotely
Real estate investor and developer Ellis Partners has acquired a nine-story Class A office building in San Francisco, reinforcing the city’s attractiveness as a core market for office investors even as demand for that space remains below normal.
San Francisco-based Ellis is the new owner of a 179,000-square-foot building at 153 Townsend St., according to a statement Wednesday from CBRE, which represented the company in the deal and arranged a loan to finance it. The sale was conducted off-market, Kyle Kovac, an executive vice president at CBRE, said on Wednesday.
CBRE’s San Francisco Investment Sales team of Mike Taquino, Kovac and Giancarlo Sangiacomo represented Ellis in the sale, while the commercial brokerage firm’s local debt and structured finance team, led by Mike Walker and Brad Zampa, arranged the fixed-rate loan, the release said. Kovac and the other brokers declined to disclose the price or any other details beyond the release, including the loan’s interest rate. The seller was American Realty Advisors, which bought the property in 2012 for about $93.8 million, according to data from Reonomy, a commercial real estate analytics firm, and First Republic Title records.
American Realty declined to comment, and Ellis didn’t respond to requests for comment.
The building is in the city’s South of Market neighborhood, home to established tech companies and startups such as Salesforce, Slack and Okta. Built in 2002, it’s across the street from Oracle Park, where the San Francisco Giants play, and within two blocks of a Caltrain terminal and a subway stop, according to CBRE’s release.
The property is fully leased and mostly occupied by Ancestry.com, which is reportedly renting 128,570 square feet across four floors through February 2030. The company put its entire block of space on the market for sublease earlier this year, as it planned to transition to a hybrid work model, although a spokesperson said in June that it intends to maintain an office presence in San Francisco, the San Francisco Business Times reported at the time.
Ellis’ acquisition marks its first through EPNY Ventures I LLC, an investment vehicle and a joint venture between Ellis and the New York State Common Retirement Fund, which provided it with a $200 million equity commitment. The vehicle, which closed in September 2019, focuses on acquiring and managing core office, industrial and retail properties in the San Francisco Bay Area.
“We are thrilled to be adding 153 Townsend to our core portfolio and look forward to identifying complementary investments to fill out the balance of our venture,” Jason Morehouse, partner and director of acquisitions at Ellis, said in CBRE’s release.