838 grant brochure

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CONFIDENTIAL OFFERING MEMORANDUM

INVESTMENT OFFERING – FALL, 2014

838 GrantSan Francisco, CA

VALUE-ADD / OWNER-USER INVESTMENT OPPORTUNITY

Capital Markets | Investment Properties


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2 942 Market Street | San Francisco, CA

THE OFFERING

CBRE, as exclusive advisor, is pleased to present the unique opportunit y to acq

838 Grant Avenue, San Francisco, California (the “Property”) an approxima

63,126 rentable square foot, six (6) story office and retail building located

block on Grant Avenue between Clay and Washington Streets. The building w

built in 1966 by present ownership. This iconic building is coming to market

the very first time and offers investors a rare, value-add opportunity in the hear

Chinatown in downtown San Francisco. The future owner may continue opera

the building in its current condition, increasing rents while keeping opera

expenses low and enjoying excellent cash returns or fully renovating the build

taking advantage of its excellent “bones” to cre ate ideal space to cater to crea

technology tenants in a portion of the building and reposition the existing of

retail to meet the needs of today’s retailers and restaurateurs.

838 Grant Avenue is an approximately 63,126 rentable square foot, six (6) s

reinforced concrete office and retail building and is situated on approxima

8,250 square feet of land. The Property is located on the east side of Grant Ave

between Clay and Washington Street in the heart of the City’s Chinatown.

currently configured with retail on the park level, ground and mezzanine spa

offices on floors 2-4 and a restaurant/banquet/event space on the 5th, 5th f

mezzanine and 6th floor of the building.

The build ing house s over 27 tenant s i n s uites rang ing from 139 squar e fe

7,600 + square feet. The building owner occupies the entire park level and sec

floors of the building, representing 23.5% of the Property.

Property Address 838 Grant Avenue

Rentable Area 63,126 rentable square feet

Year Bui lt 1966

% Leased 98.6%

Number of Tenants 27

Lease Expiration Date(s) M-T-M, 12-31-2014

Unparalleledworld-classocation in theest performingffice market inhe country


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0 4 942 Market Street | San Francisco, CA

NVESTMENT HIGHLIGHTS

andmark Chinatown Location

cated mid-block on the east side of Grant Avenue betwee n Clay and Washington Streets

d is the tallest and most prominent building in the neighborhood.

World-Class Location – The Property is located in the heart of Chinatown on downtown

San Francisco’s oldest street, Grant Avenue. The property is immediately adjacent to Portsmouth

Square Park and garage and is located two short blocks to the Transamerica Pyramid.

Pre-eminent Building – 838 Grant is the tallest and most recognizable landmark in

Chinatown, with no other properties currently for sale anywhere near the size and scale

of the property. Height limits surr ounding 838 Grant are 50 feet, thus it is unlikely that new

construction will be anywhere near the height and scale of 838 Grant Avenue.

Bridge to SOMA – by virtue of the property’s proximity to the to-be-built Central Subway

Chinatown stop, 838 Grant Street will bridge Chinatown to SOMA.

Outstanding Access to Public Transportation – 838 Grant is surrounded by the City’s

public transportation infrastructure, with MUNI light rail and BART (the Bay Area’s high-

speed rail system) less than 8 blocks away, the Chinatown stop of the Central Subway less

than 2 blocks away, (currently under constr uction) as well as numerous sur face bus stops

ess than 1 block away. This robust public transportation infrastructure easily connects

the Property to all parts of San Francisco, the South Bay, East Bay and Marin county.

With the opening of the Central Subway in 2017, the Property will easily access the

Caltrain Station at 4th and Townsend, which provides heavy rail service to the Peninsula

and Silicon Valley. 838 Grant also benefits from easy access to Interstates 80 and 280

and Highway 101, providing convenient automobile transportation connections to the

entire Bay Area.

Portsmouth Square Park and Garage – Portsmouth Square – San Francisco’s first

open space, widely referred to as “the heart of Chinatown,” is a history and amenity rich

park located immediately to the east of 83 8 Grant. The park is also home to a 50 5 stall, 4

evel subterranean public parking garage which offers hourly, daily and monthly parking to

the general public. The San Francisco Planning Department has recently designated the

Portsmouth Square Area Project to reimagine one of the City’s most significant historic,

cultural and civic spaces through a joint effort of the San Francisco Planning Department

and the San Francisco Recreation and Parks Department. Presently, the Project is in

phase 2 – Portsmouth Square concept design with detailed design development,

environmental review and legislation & approvals anticipated in 2015.

Tourism – San Francisco hosted 16.9 million visitor s in 2013, with visitor spending reaching

ts highest level ever of $9.38 bi llion. Chinatown is one of the top 3 neighborhoo ds visited

according to the San Francisco Travel Association.


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838 GRANT

AVENUE


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NVESTMENT HIGHLIGHTS (con’t)

alue-Ad d Opp ortu nity

e e ntire build ing wi ll be unenc umber ed up on the expir ation of the Empre ss of China’s lease in Dec ember 2014 – a ll oth er te nants

e M-T-M.

Conversion to Creative Space: Tenant demand continues unabated for well-located, quality creative space, with these spaces

easing faster and at sig nificant rental rate premiums. With the M-T-M leases and the Empress of Chi na’s lease expiring in December

2014, the future owner will have maximum flexibility to take advantage of what is an excellent leasing marketplace in an ideal

ocation in close proximity to the downtown financial district. With nearly 18’ clear ceiling heights on the fifth floor and nearly 12’

clear heights on the sixth floor of the building, concrete floors, beautiful waffle ceilings and extensive window-line showcasing

outstanding bay and City views, 838 Grant has the potential to become some of the finest creative office space in San Francisco.

Conversion to Retail Mall Concept: Unparalleled opportunity for restaurant and retail space in the heart of Chinatown. Thisflagship configuration has access and visibility not only to the heavily trafficked Grant Avenue but also Portsmouth Square Park.

The park is a bustli ng public space with signi fica nt l ocal and touris t tr affi c ye ar round. The impen ding park renov ation will only

make the space more inviting and primed for a retailer or restaurant to play off of the activity. The space is arranged such that a

restauranteur could create one or more dining experiences and/or curate a market place which would be a destination for locals

and tourists from around the globe, a blank canvas and opportunity to “amenitize” an iconic destination. San Francisco is a City

with a significant culinary culture and Chinatown is a highlight.

Ideal Owner-User Opportunity

• With the entirety of 838 Grant Avenue becoming available on or about December 2014 and an unparalleled North Financ

location, the Property is an ideal candidate for a wide variety of owner-users including venture capital, technology, ente

retail, retail mall operators or famil y/private companies of any kind. With the lack of quality space alternatives in NOMA a

variety of financing options available, 838 Grant Avenue will appeal to owner-users looking to control their real estate

this supply-constrained marketplace.

Free and Clear

• The P rope rty will be de live red fr ee an d cle ar of existi ng fi nanci ng, a llowi ng an investo r or owner- user to cap itali ze the t

in the most efficient manner.

Excellent Market Fundamentals – Nation’s Strongest Office Market

San Francisco’s office market fundamentals continue to be the strongest in the nation:

•

Avera ge va canc y rate s acr oss S an Fra ncisc o hav e dro pped to 6.2% , down over 55% fro m thei r 2010 highs. The v acaCBD is currently 6.8%, a nearly 75% decline since 2010.

• Avera ge askin g r ental rates acros s Sa n Fr ancis co have incre ased for 17 st raigh t q uarte rs. NOMA’s a vera ge askin g r

have grown over 98% during that time.

• San Francisco has experienced positive net absorption in each of the last 14 quarters, with over 6 million square fee

positive net absorption since the beginning of 2011.


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838GrantSan F ranc isco , CA

Capital Markets | Investment Properties

INVESTMENT CONTACTS

Dave Terzolo

Senior Vice President

+1 415 291 1732

[email protected]

Lic. 00906167

Sean Sullivan

Executive Vice President

+1 415 772 0139

[email protected]

Lic. 01199428

LEASING CONTACTS

Charlie Withers

Senior Vice President

+1 415 291 1715

[email protected]

Lic. 01414522

Laura Sagues

Urban Retail

+1 415 772 0122

[email protected]

Lic. 01888298

DEBT & STRUCTURED FINANCE

James Korinek

Executive Vice President

+1 415 772 0416

[email protected]

Lic. 01917740

Michael Walker

Vice President

+1 415 772 0278

[email protected]

Lic. 01843658

CBRE, Inc. | Broker Lic. 00409987101 California Street, 44th Floor | San Francisco, California 94111

© 2014 CBRE, Inc. The information contained in this document has been obtained from sources believed reliable. While CBRE, Inc. does not doubt its accuracy, CBRE, Inc. has not verified it and makes no guarantee,

warranty or representation about it. It is your responsibility to independently confirm its accuracy and completeness. Any projections, opinions, assumptions or estimates used are for example only and do not represent

the current or future performance of the property. The value of this transaction to you depends on tax and other factors which should be evaluated by your tax, financial and legal advisors. You and your advisors should

conduct a careful, independent investigation of the property to determine to your satisfaction the suitability of the property for your needs. CBRE and the CBRE logo are service marks of CBRE, Inc. and/or its affiliated o

related companies in the United States and other countries. All other marks displayed on this document are the property of their respective owners. Photos herein are the property of their respective owners and use of

these images without the express written consent of the owner is prohibited.

838 grant brochure

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