CIM Group looks to sell San Francisco office building leased to Yelp

CIM Group is looking to sell a San Francisco office building fully leased to Yelp. 

The Los Angeles-based investment firm has put 55 Hawthorne Street, a 145,000-square-foot office building in the South Financial District, on the market, according to a listing from JLL, which is marketing the building for sale. No asking price was disclosed.

CIM declined to comment. JLL did not respond to a request for comment. 

The 11-story building offers “near-term cash flow,” according to the listing, seeing that Yelp’s lease is expiring in July 2025. 

Yelp has worked to reduce its office space across San Francisco over the last three years. In 2021, it relocated its more than 180,000-square-foot headquarters on New Montgomery Street to a new building down the street, shrinking it to about a fourth of the size in the process. 

Earlier this year, Yelp put up about 18,000 square feet at its office at 350 Mission Street, according to the San Francisco Chronicle, a building owned by Kilroy Realty. 

CIM bought the 55 Hawthorne building for $123 million in 2016, or about $847 a square foot, records show. Office valuations have sharply fallen since then, with some deals in San Francisco trading at below $150 a square foot. 

CIM is offering buyers the opportunity to assume debt maturing in 2027 as part of the deal. 

JPMorgan Chase Bank originated a $61.5 million loan in connection with CIM’s purchase, and then packaged the loan into a commercial mortgage-backed securities deal. 

At the end of December, the property was making three times what was needed to service the fixed-rate debt, according to Morningstar data.