Hines Global Income Trust has acquired the Duboce Apartments, an 87-unit rental complex in the Duboce Triangle, for $38 million, The Real Deal has learned.
Hines acquired the ground lease for the 70,500-square-foot asset — large for the San Francisco market — with addresses of 2198 Market Street and 181 Sanchez Street, on Sept. 16, according to property records and a Securities & Exchange Commission filing from Oct. 7. The sale comes to about $436,800 per unit.
As part of the deal, Hines signed an agreement with the City of San Francisco to keep 10 units at the property below market rate. At the time that the transaction was completed, the property was 97 percent leased.
The seller, residential developer Greystar, completed the property in 2017. The building contains a mix of one-bedroom and two-bedroom units ranging in size from 543 square feet to 1,315 square feet, with the monthly rent starting at $3,837 and going up to $8,261, according to a listing on Apartments.com. The complex also contains amenities such as a rooftop Jacuzzi, a resident lounge and a rooftop with outdoor fire pit and BBQ grills, according to a previous story from Robb Report.
The ground floor of the building contains a 2,700-square-foot restaurant space and two retail units over 1,000 square feet.
Hines recently ran into trouble with two downtown high-rise projects, according to the San Francisco Examiner. The firm reportedly let an option to build a 47-story residential building in the South of Market area lapse. The company also did not pay a $5 million penalty to complete an 800-foot-tall office, condominium and hotel complex. The two projects were proposed to have a total of 850 residential units, a significant portion of which would have been below market rate.
Hines Global Income Trust is a real estate investment trust run by the Houston development company. The REIT has about $93 billion under management invested in 141 buildings, according to its website.