Paramount Sells Stake in San Francisco Asset
Paramount Group has sold a 25 percent interest stake in One Front Street, a 649,000-square-foot office building in San Francisco. The deal valued the asset at $255 million.
The company will continue to own the remaining 75 percent interest and manage and lease the property. As part of the sale, Paramount provided $40.5 million in seller financing at a 5.50 percent fixed interest rate for two years. Additionally, the firm retained $11.5 million net proceeds from the transaction.
Paramount acquired the asset in December 2016 from Invesco Real Estate for $521 million, or approximately $800 per square foot, according to CommercialEdge information.
Completed in 1981, the 38-story high-rise is on the corner of Front and Market streets, within San Francisco’s North Financial District. Downtown San Francisco is 2 miles away, while the city’s international airport is 13 miles south.
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Designed by Skidmore, Owings & Merrill, the tower is LEED Platinum-certified and has floorplates ranging between 16,781 and 18,945 square feet, as well as 1,000 square feet of first-floor retail. Amenities at the building include meeting rooms, break areas, conference rooms, wellness and game areas. The property also has 290 parking spaces and 17 passenger elevators.
San Francisco assets trade above national average
San Francisco’s office investment volume in the first quarter of this year clocked in at $190 million, according to the latest CommercialEdge office report. Assets in the metro traded for $259 per square foot, well above the $183 national average.
In April, a joint venture between DivcoWest and Blackstone Real Estate paid $111 million for 199 Fremont Street, a 420,000-square-foot building. This marked the largest post-pandemic deal in the metro.
That same month, LendingClub Corp. agreed to acquire 88 Kearny St. in downtown San Francisco for $74.5 million. The company will occupy part of the 233,887-square-foot building for use as its headquarters.
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