Essex Property Trust has moved into San Francisco’s multifamily market to acquire a large chunk of housing units—part of a mixed-use building located in the city’s highly publicized Mid-Market district. The fully integrated real estate investment trust has shelled out $135 million for the residential component of Fox Plaza—a 29-story high-rise building located at 1390 Market St.—from Archstone, who was initially looking for a sale price more in the $150 million range.
The 444 units that Essex has acquired, located on floors 14 through 29, offer great views of the city and feature high ceilings and large decks. Three quarters of the units are 450-square foot studio apartments, with the remaining apartments featuring one- and two-bedroom floorplans. Essex Property Trust is also getting a two-level underground parking facility that can accommodate as many as 405 vehicles.
The acquisition deal did not include the lower floors featuring commercial office space. However, an adjacent two-story, 37,800 square-foot commercial building was part of the agreement.
The REIT’s interest in this second building is clearly linked with the fact that there is permitting in place for a 250-unit, 11-story apartment development. While Essex maintains that it has no immediate intentions of activating the entitlement, the entity has confirmed that the possibility of developing the tower will be evaluated in the future.
The new owner is set to commit $27 million over the next couple of years for the renovation and improvement of Fox Plaza. The 1968-built structure will undergo extensive interior and exterior improvement work in order to raise its current profile in one of the main emerging submarkets in the San Francisco Bay Area.
Photo courtesy of user J. Ash Bowie via Wikimedia Commons
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