Property Summary:
Premier, one of a kind Union Square landmark
166 Geary is a trophy Union Square asset. The Property is located one door away from Union Square and across from Neiman Marcus’s entrance, at one of the busiest pedestrian intersections in San Francisco. In addition to its world class location, 166 Geary has two sides of retail frontage and is Union Square’s second tallest building, offering panoramic views in all directions.
Investment Summary:
The purchase price for the property was $60,000,000. The retail owners paid $47,000,000, representing $4700/sf for approximately 10,000 rsf. Cresta Properties sponsored the acquisition of the office portion for $17,000,000, representing a purchase price of $475/sf for approximately 36,000 rsf. Osher invested with Cresta Properties.
At the time of the acquisition the in-place net operating income represented a 4.3% capitalization rate. The value-add strategy was to change the tenant base and increase rents to market. The tenant base was mainly beauty salons and hairdressers. Those tenants tend to be high users of building services such as utilities and overall building traffic. They also usually require smaller spaces which create broken up multi-tenant floors.
The 2,500 sf floor plates make 166 Geary ideal for full floor tenants. The size works well for early-growth stage startups and small professional companies. In July 2015, the13th floor was rented $69.60/sf. That represents a 25% increase from the highest in-place rent at that time.
Benefits to Full Floor Concept
-panoramic views
-open configuration, 15’ open ceilings are ideal for creative space
-great natural light
-direct floor access from elevator
To ensure the highest possible market rents are obtained, upgrades to common areas would be required. A well known architectural firm was retained to help with the designs to fully renovate the lobby, interior elevator cabs and other common areas. The new design elements are a mix of white marble, glass and brass. A perfect blend of modern and period elements to highlight the age and characters of the building.
Design proposal has been submitted to the planning department. Renovation will be completed in the 2nd quarter of 2016.
The History:
On April 18, 1906 at 5:18am San Francisco was struck by 7.8 magnitude earthquake. Over 3 days following the earthquake there were intense fires that destroyed 25,000 buildings over 490 city blocks.
At the time of the earthquake and fires, 166 Geary was just a steel skeleton. 166 Geary stood tall as buildings surronding it crumbled to the ground. After the fires 166 Geary was called the "the luckiest building in San Francisco".
Photos courtesy of the San Francisco Pubic Libarary
Post earthquake, survivors gathered in Union Square. In the background fires rage as they approach 166 Geary.
Arial photos of the City engulfed in flames.
Post earthquake and fires 166 Geary stands nearly alone among total destruction.
