YEAR BUILT:
1923

PROJECT DETAILS:
This is a unique redevelopment/repositioning opportunity in Downtown San Francisco. This 35,475 square foot mixed use office and retail property is adjacent to the Ritz Carlton Residences, a soon to be completed luxury condominium, fractional ownership and retail project one block east of the world renowned Union Square Shopping District.   Union Property Capital’s strategy is to reposition and upgrade the retail and the office space while addressing variety of deferred maintenance and ADA issues. 

660 Market provides the venture its targeted returns with no entitlement risk and very limited construction risk.  Upon completion of UPC’s business plan, the venture has the flexibility to sell the entire project or condominium interests on a floor by floor level.  Both of these sales strategies provide above market returns.

660 Market has a unique location between Financial District and Union Square. Located on the north side of Market bounded by the Ritz to the west, the McKesson Building to the east and across Market Street from the Sheraton Palace Hotel.  The Ritz is scheduled to complete its $90 million renovation in  2008 which will include 49 fractional residences and 52 private ownership residences. At the Palace plans are in play to add up add a 500 unit residential tower.

The Union Square sale and leasing market has been experiencing tremendous activity driven by increasing sales, a limited amount of space and an abundance of capital. With the opening of the Westfield San Francisco Center two blocks away, Market Street has grown in a number of directions.  The 500,000 square foot Westfield mall and a 9 screen cinema are a huge Bay Area draw to an already flourishing neighborhood.  The 245,000 square feet of class-A office space within San Francisco Center has proven to be a core office location as well as a tremendous amenity for the thousands of new residences that have moved downtown in the past few years.

The San Francisco office market continues to flourish as viable space alternatives are limited and any new supply is years away. With two consecutive years of positive net absorption in excess to 1.2 million square feet, the vacancy rates within the Financial District and Union Square fell to 13.2% and 12.5% respectively, in 2006.   660 Market is currently ignored by most leasing professionals due to its condition and poor curb appeal.  However, with the opening of the Ritz sales office and the opportunity to reposition the balance of the ground level, there is justification for taking an office tenant inside.  Once upstairs all suites offer high ceilings, an abundance of natural light and full floor identity.  Quality space alternatives in the $40 per foot range are becoming difficult to find.