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REA
May 03, 2017  

Bentall Seeking Partner for Offices in SF, NY

A fund advised by Bentall Kennedy is looking to recapitalize a portfolio of San Francisco and New York office properties worth close to $1 billion.

Multi-Employer Property Trust is offering a stake of up to 49% in the the three buildings, with a combined 1.2 million square feet. The properties are at 600 California Street and 475 Sansome Street in San Francisco’s Financial District and 757 Third Avenue in Midtown Manhattan. They have an estimated combined value of $970 million, or $825/sf.

Seattle-based Bentall has hired Eastdil Secured to drum up a single partner for the package. The brokerage is expected to approach just a handful of large investors. Sources close to Bentall say it isn’t under any pressure to make a deal if the price isn’t right. Multi-Employer is an open-end fund backed by private pensions.

The Manhattan property is the largest of the three, with 459,000 sf. The 27-story building, on the northeast corner of East 47th Street, was developed in 1962 and underwent major renovations in 2013. It is 91% leased. The largest tenant is accounting giant Grant Thornton, which is leasing 130,000 sf until 2024, according to CoStar. Others include NTT America (36,000 sf), Questex Media (19,000 sf) and TEKsystems (15,000 sf).

In San Francisco, the 363,000-sf property at 600 California Street is 95% occupied. The 20-story building was constructed in 1991, and the lobby and other common areas were recently renovated. Major tenants include WeWork (73,000 sf), Omnicom Group (42,000 sf) and Veritas Investments (28,000 sf).

The 21-story building at 475 Sansome Street, with 353,000 sf, is 97% leased. It was developed in 1992. Oracle is the main tenant, with over 107,000 sf under lease. Amazon.com is among the other occupants.