Offering Memorandum Union Square | San Francisco
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OFFERING MEMORANDUM 166 GearyUNION SQUARE | SAN FRANCISCO A PRIDE-OF-OWNERSHIP COMMERCIAL ASSET ADJACENT TO SAN FRANCISCO’S FAMED UNION SQUARE 166 GEARY STREET exclusively listed by: Vincent Schwab Senior Managing Director Investments San Francisco Office [email protected] Cell: (415) 828-4372 Tel: (415) 625-2171 Fax: (415) 989-9220 UNION GLicense: CA 00840133 SQUARE SAN FRANCISCO CONFIDENTIALITY AGREEMENT The information contained in the following Marketing Brochure is proprietary and strictly confidential. It is intended to be reviewed only by the party receiving it from Institutional Property Advisors, a Division of Marcus & Millichap (“IPA”) and should not be made available to any other person or entity without the written consent of IPA. This Marketing Brochure has been prepared to provide summary, unverified information to prospective purchasers, and to establish only a preliminary level of interest in the subject property. The information contained herein is not a substitute for a thorough due diligence investigation. IPA and Marcus & Millichap have not made any investigation, and make no warranty or representation, with respect to the income or expenses for the subject property, the future projected financial performance of the property, the size and square footage of the property and improvements, the presence or absence of contaminating substances, PCB’s or asbestos, the compliance with State and Federal regulations, the physical condition of the improvements thereon, or the financial condition or business prospects of any tenant, or any tenant’s plans or intentions to continue its occupancy of the subject property. The information contained in this Marketing Brochure has been obtained from sources we believe to be reliable; however, IPA and Marcus & Millichap have not verified, and will not verify, any of the information contained herein, nor has IPA or Marcus & Millichap conducted any investigation regarding these matters and they make no warranty or representation whatsoever regarding the accuracy or completeness of the information provided. All potential buyers must take appropriate measures to verify all of the information set forth herein. Seller retains all rights and discretion to determine the offer and acceptance process including but not limited to the right to accept or reject any offer in its sole and absolute discretion. Seller shall only be bound by duly executed and enforceable agreements entered into, if any. ALL MATTERS PRIVILEGED AND CONFIDENTIAL. NON-ENDORSEMENT NOTICE Institutional Property Advisors, a Division of Marcus & Millichap (“IPA”) is not affiliated with, sponsored by, or endorsed by any commercial tenant or lessee identified in this marketing package. The presence of any corporation’s logo or name is not intended to indicate or imply affiliation with, or sponsorship or endorsement by, said corporation of IPA or Marcus & Millichap, its affiliates or subsidiaries, or any agent, product, service, or commercial listing of IPA or Marcus & Millichap, and is solely included for the purpose of providing tenant lessee information about this listing to prospective customers. ALL PROPERTY SHOWINGS ARE BY APPOINTMENT ONLY. PLEASE CONSULT YOUR IPA ADVISOR FOR MORE DETAILS. www.IPAUSA.com Offices Throughout the U.S. and Canada SPECIAL COVID-19 NOTICE All potential buyers are strongly advised to take advantage of their opportunities and obligations to conduct thorough due diligence and seek expert opinions as they may deem necessary, especially given the unpredictable changes resulting from the continuing COVID-19 pandemic. Marcus & Millichap has not been retained to perform, and cannot conduct, due diligence on behalf of any prospective purchaser. Marcus & Millichap’s principal expertise is in marketing investment properties and acting as intermediaries between buyers and sellers. Marcus & Millichap and its investment professionals cannot and will not act as lawyers, accountants, contractors, or engineers. All potential buyers are admonished and advised to engage other professionals on legal issues, tax, regulatory, financial, and accounting matters, and for questions involving the property’s physical condition or financial outlook. Projections and pro forma financial statements are not guarantees and, given the potential volatility created by COVID-19, all potential buyers should be comfortable with and rely solely on their own projections, analyses, and decision-making.) UNION SQUARE San Francisco 166 GEARY IS PERCHED STEPS FROM UNION SQUARE, SURROUNDED 166 BY ABUNDANT HIGH-END RETAIL, EMPLOYMENT, AND HOSPITALITY. Geary UNION SQUARE IS A BUSTLING CORNERSTONE OF SAN FRANCISCO, SERVING AS A VITAL COSMIPOLITAN CITY CENTER SECTION NAME 2 INVESTMENT OVERVIEW Institutional Property Advisors (IPA), as exclusive advisor, is pleased to offer investors the opportunity to purchase an interest in 166 Geary Street, a 16-story commercial condominium located adjacent to Union Square in San Francisco, California. The offering totals 34,419 square feet of rentable area spread over the top 14 floors of the building, offering tenants breathtaking views in virtually every direction. The building is situated on a 5,380-square-foot lot, which is shared with the retail condominium owner. The buyer must assume the existing financing as summarized in this memorandum. This investment opportunity is 79.5% leased demised into 31 separate suites in its current configuration. Cosmetology tenants and office users comprise 39% and 21% of the building’s area, respectively, with 3% tailoring tenants and the remainder in rentable condition, but currently vacant. Much of the tenancy has made large capital investments into their individual suites, making them more committed than the average tenant in the long- vcterm. This building should continue to stay occupied both through existing long-term tenancy commitments and from outside demand for both cosmetic and general office needs in San Francisco’s central business and shopping district. The building’s landmark location is one building off Union Square near BVLGARI and Chanel retailers, and directly across from Neiman Marcus and the well- known “Rotunda” restaurant, at the intersection of Geary & Stockton. Ample parking is available at the nearby Union Square and Sutter Stockton garages with total combined parking spaces exceeding 2,300 spaces. 166 Geary has an unbeatable downtown San Francisco location, offering walk, bike, and transit convenience and to its tenants and patrons, and is a true pride-of-ownership building. Completed in 1907, the asset has a rich history. The property survived the Great San Francisco Earthquake of 1906 and has been renamed from the 9.49% IRR Whitell Building to the Grace Building. Between 1909 and 1913, the Hastings College of the Law occupied the twelfth floor. ON 7-YEAR Executive Summary Executive In addition to the current rentable area, the future owner has the potential to HOLD convert the usable basement of approximately 2,000 square feet to rentable space, with entrance from Geary. 166 Geary | 10 NEAR SAN FRANCISCO’S TALENT PIPELINE, LARGE TECH EMPLOYERS AND COVETED INVESTMENT FINANCIAL DISTRICT • As of March 2020, San Francisco was ranked 8th in the world and 2nd in HIGHLIGHTS the United States on the Global Financial Centre’s Index • Bay area employers are strategically located near prestigious universities, PRIDE OF OWNERSHIP COMMERCIAL ASSET including University California at Berkeley, Stanford University, ADJACENT TO SAN FRANCISCO’S FAMED University of San Francisco and University California at San Francisco UNION SQUARE • The subject is located within 1 mile of San Francisco’s Financial District • Generational opportunity to acquire large commercial (FiDi) with employers including Google, Salesforce, BlackRock, Quip and building in San Francisco’s Union Square LinkedIn • The building is 79.5% leased with 31 suites of mainly • As of 2020, San Francisco has the highest salaries, disposable income, and cosmetology tenants, including plastic surgery practices, median home prices in the world at $1.7 million hairdressers, nail salons, tailors, and dentists • Current tenants are sticky, with large capital investments into tenant improvements 166 GEARY IS SURROUNDED BY SAN FRANCISCO’S MOST FAMED TOURISM ATTRACTIONS • 2,374 24-hour public parking spaces within 1/4 Mile • San Francisco Travel reported a total of 26.2 million visitors to the city in • Exceptionally safe with 9-5 onsite manager and state-of-the- 2019, an increase of 1.4 percent compared to 2018 (www.sftravel.com) art CloudKeyz internet-connected security system • Total 2019 spending by visitors was $10.2 billion, up 2.7% ($10 billion) in • Tremendous amount of natural light with +/- 6 foot tall 2018 (www.sftravel.com) windows and unobstructed views in all four directions on • The subject is within 1 mile of the city’s most famed attractions including floors 7 and up Museum of Modern Art, The Open-Air Market at the Ferry Building, Union Square and the Moscone Center STRATEGICALLY LOCATED STEPS FROM UNION SQUARE WITH SURROUNDING HIGH-END RETAIL, EMPLOYMENT AND LOCAL DEMOGRAPHICS HAVE ONE OF THE HIGHEST HOSPITALITY SALARIES AND POPULATION DENSITIES IN THE • 166 Geary is located in an extremely dense quarter-mile UNITED STATES radius with a daytime population of about 95,000 people • In 2019, 166 Geary’s daytime population was 446,843 within 1 mile, • The asset is located in Union Square’s employment hub with 794,764 within 3 miles and 991,851 within 5 miles about 9.5