New York Life in Negotiations for 353 Sacramento St. Acquisition
New York Life Real Estate Investors is reportedly in advanced stages of negotiations aimed at acquiring the debt linked to the property at 353 Sacramento St., a move that could potentially mark the firm’s third acquisition of an office building in San Francisco within the past year, as reported by the San Francisco Business Times.
Details of the Deal
This transaction involves a partnership between New York Life’s real estate investment division and Lincoln Property Co., where they plan to settle some of the outstanding debt owed to lender Aareal, associated with the 284,000 square foot office space.
The previous owners, a collaboration between Pacific Oak Capital Markets and Israeli insurer Migdal, reportedly had a debt obligation of approximately $89.6 million, with sources indicating that the prospective purchase price will range in the low $200s per square foot. This translates to a total valuation of about $50 million to $60 million.
New York Life’s Recent Activity in San Francisco
New York Life has shown a proactive approach towards the San Francisco real estate market, particularly focusing on acquisitions perceived as below market value. In August, the firm, in collaboration with investment company Bridgeton, acquired an office building located at 410 Townsend St. in the SoMa neighborhood for $22 million, which encompasses 77,000 square feet.
Albert Pura, a senior director of transactions at New York Life, remarked at the time, “We’re starting to see the green shoots of a San Francisco real estate market recovery as both start-up and more established companies seek compelling workspaces.” He emphasized the attractiveness of the deal by pointing out that the purchase price was substantially lower than a previous sale, where Clarion Partners had paid $85.7 million in 2019.
Previous Transactions
In another significant transaction, New York Life previously partnered with Lincoln Property Co. to purchase an office building at 600 Townsend St. W., a 210,000 square foot property, for $62 million last fall.
As indicated by Colin Yasukochi, executive director at CBRE’s Tech Insights Center, San Francisco witnessed around $1 billion in property transactions the previous year, predominantly involving distressed sales. Yasukochi noted, “Either a loan has come through and they can’t refinance it or they just want to sell it because performance has gone down.”
Anticipated Closure of Acquisition
While the acquisition of 353 Sacramento St. remains in the negotiation phase, indications suggest a deal may be finalized shortly, as reported by the Business Times. At the time of writing, representatives from New York Life and involved parties have not responded to inquiries for further comments.
