Aralon Buys Industrial Building in San Francisco for $12M

Aralon Properties bought a 72,000-square-foot industrial building in San Francisco for $11.5 million after it was turned over to its lender because of an unpaid loan.

The locally based developer acquired the former wholesale jewelry market at 101 Utah Street, in Showplace Square, the San Francisco Business Times reported. The seller was BMO Bank.

The deal works out to $160 per square foot.

It was BMO that picked up the keys this summer for the two-story building from locally based Swift Real Estate Partners, which failed to pay off a 2022 refinancing loan of $47.6 million. In July, the firm still owed $31 million.

Swift bought the trapezoidal building in 2018 for $21 million, or $291 per square foot, after years of negotiation with the jewelry vendors who owned the building. The company had planned to convert the now 68-year-old building into premium life sciences offices and research labs.

The developer broke ground during the pandemic, but building permits issued for the conversion in 2022 don’t list the job as finished.

The $11.5 million sale to Aralon will offset a portion of the loss for BMO, according to the Business Times.

Tom Murphy, president of Aralon, declined to comment to the newspaper about his plans for the property.

Aralon Properties, founded by Murphy in 2016, owns a real estate portfolio in greater San Francisco that includes offices, life science labs, industrial buildings, shops, restaurants and apartments, according to its website.

Early last year, it updated plans to build a 24-story condo tower at 955 Sansome Street on Telegraph Hill, revising an initial 10-story proposal that had already provoked pushback by neighborhood groups because of its height.

Its holdings include a two-building industrial property at 474 Bryant Street in Central SoMa where it proposed a 135,900-square-foot office development in 2020.

A year earlier, Aralon unveiled plans to replace an industrial property at 560 Brannan Street in Central SoMa with 120 homes. It also owns a 41,000-square-foot industrial building at 1500 16th Street that serves as the headquarters for Sonder, a short-term rental platform.— Dana Bartholomew