A joint venture and a REIT bought the headquarters of the San Francisco District Attorney’s office for $182.5 million in two separate deals, the seller said.
Lincoln Property Company and Korea Asset Investment Management bought the 127,100-square-foot building at 350 Rhode Island Street, at the base of Potrero Hill, for $118 million, according to Washington, D.C.-based PRP.
Safehold Inc., a publicly traded REIT, bought the land beneath it for $64.5 million and aims to lease it to the venture for 99 years, according to the San Francisco Business Times. The deals value the site at $1,436 a square foot, PRP said.
PRP, which paid about $134 million in 2019 for the land and building, maximized its value by splitting the sale in two, Paul Dougherty, its president, said in a statement. “We are not aware of another owner that has successfully undertaken such a complicated effort at the sale of an asset,” Dougherty said.
The city and county of San Francisco lease almost 80 percent of the building through 2033, according to PRP’s release and The Registry, a real estate news publication. The San Francisco police department plans to occupy almost all its remaining offices by the end of 2024, The Registry and the Business Times said. Global event agency Freeman XP also occupies a portion of the building, although it’s unclear exactly how much or when its lease term expires.
The property was initially part of a two-building complex completed in 2002 and is referred to as 350 Rhode Island North. The other building, totaling 138,000 square feet, is owned by PCCP, which bought it for $120 million in 2019.
Adam Lasoff and Rob Hielscher of JLL’s San Francisco capital markets group represented PRP in the sale of the building, the release said. PRP worked directly with Safehold on the land sale.
[San Francisco Business Times] — Matthew Niksa