Swift Real Estate Partners has bought a 180,600-square-foot office building with ground-floor shops at a transit hub in Millbrae for $47.7 million.
The San Francisco-based investor bought the three-story commercial building in Gateway at Millbrae Station at 200 Rollins Road, the San Francisco Chronicle reported.
The seller was San Jose-based Urban Republic Properties, which in 2019 broke ground on the largest multimodal transit hub in the West, across from San Francisco International Airport.
The Millbrae Station deal works out to $264 per square foot.
Including the just-sold office building, the 9.6-acre Gateway at Millbrae Station includes 157,700 square feet of offices; 43,400 square feet of shops and restaurants; 400 apartments, including 80 for low-income veterans; and a 164-room Residence Inn by Marriott hotel.
In December, the office component bought by Swift was leased to transit agency SamTrans, according to the Chronicle. Financial terms for the 30-month lease were not disclosed.
Jack Waldsmith, director at Swift, said the firm bought the office-retail project despite the “volatile market” because of its location and the SamTrans lease.
“This is a compelling opportunity that exemplifies the investments Swift is making in the office sector — high-quality properties in the best markets with strong tenancy and cash flow. SamTrans’ long-term commitment to the property is a testament to its appeal, and we look forward to bringing this building to life,” Waldsmith told the Chronicle.
Swift’s next step will be leasing the building’s remaining retail component, Waldsmith said. Current tenants include Chick-fil-A, Panda Express, Basecamp Fitness, Crumbl Cookies, Sourdough & Co., iCode, Liberty Bank and Zero&.
The investor also plans to complete tenant improvements projected to exceed $100 million. SamTrans plans to move its headquarters from San Carlos to Gateway at Millbrae Station after Swift puts the final touches on the upgrades.
In April, Republic Urban scored a $125 million commercial mortgage-backed securities loan to refinance an apartment complex completed last year at Gateway at Millbrae Station. The financing came from Argentic Real Estate Investment, which then packaged the debt into a CMBS deal.
In June, Swift Real Estate Partners defaulted on a $62.3 million loan tied to an 111-year-old office building at 55 New Montgomery Street in San Francisco’s South of Market. In November, Boston-based CrossHarbor Capital Partners took control of the the 100,200-square-foot building after a foreclosure sale.
— Dana Bartholomew
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