San Francisco’s landmark Ferry Building will soon hit the market in a deal that could surpass $300 million, or $1,250 per square foot.
The 1889 building itself is not for sale as it is a Port-owned property; Blackstone’s Equity Office Properties division is selling the rights to the remainder of a 66-year ground lease with the Port. As a result of being port-owned, there would be no transfer tax or property tax for the new landlord — ground lease estimates were $1.5 million per year in 2012.
The Ferry Building is one of San Francisco’s most famous – and lucrative – properties, towering over the terminus of Market Street at the city’s eastern edge.
The property includes 175,000 square feet of office space and 65,000 square feet of retail. Currently, 74,506 of office space is vacant, with asking rents of $95 to $100 per square foot, among the highest in the country.
The past few decades have seen the Ferry Building’s fortunes fall and rise. The building was closed and in disrepair in the 1990s, and the Embarcadero Freeway cut it off from the Financial District until the highway was demolished in 1991. A $100 million renovation restored the building, which reopened to the public in 2003.
Unlike most of the other office buildings in the Financial District, the Ferry Building has no parking of its own. But it is close to the Embaracadero BART station and has its own Muni stop. It is also a busy gateway to ferry service to Marin, the East Bay and Vallejo. An expansion of ferry service there is now underway.
“The Ferry Building is a unique mixed use property. It’s one of the earliest transit-oriented developments in San Francisco and still a fantastic model for such projects,” said Robert Sammons, regional director of research at Cushman & Wakefield.
Equity Office Properties took over the building in 2003, following the dissolution of its partnership with Wilson Meany. In 2006, Blackstone bought Equity Office for $23 billion in one of the largest leveragerd buyouts in history.
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