Landmark Building Closes at $227 Million
NEW YORK, Feb. 13, 2019 /PRNewswire/ -- Harbor Group International, LLC ("HGI") and Paramount Group, Inc. (PGRE) ("Paramount") today announced the establishment of a joint venture that has acquired 111 Sutter Street, a 293,000 square foot office building located in San Francisco's North Financial District, for $227 million or approximately $775 per square foot.
The LEED-certified property is approximately 70 percent leased primarily to technology, media, business services and not-for-profit tenants.
"Expanding to the San Francisco CBD office market is a strategic decision for Harbor Group International as we look to diversify our West Coast equity investments," said Richard Litton, President of Harbor Group International. "We are pleased to enter this strong and growing market with a very experienced and successful partner in Paramount." HGI already owns two office assets in Cupertino in the Silicon Valley.
Paramount currently holds an office portfolio of 2.9 million square feet in San Francisco that is 98 percent leased. Paramount will act as property manager for the building and oversee day-to-day operations.
"We plan to leverage our position as one of San Francisco's largest landlords to meaningfully increase the building's net operating income," stated Albert Behler, Chairman, Chief Executive Officer and President of Paramount Group. "In addition to the existing vacancy, approximately 50% of the currently occupied office space is scheduled to expire through 2021, providing us a tremendous opportunity to create value for our shareholders as we proactively manage and lease the asset."
HGI and Paramount have entered joint ventures in the past on debt investments.
About Harbor Group International
Harbor Group International (HGI) is a leading global real estate investment and management firm. With $9.0 billion in real estate investment properties, the firm invests in and manages diversified property portfolios including multifamily, office and retail properties. With over 33 years of experience in the industry and over 760 employees worldwide, HGI continues to look for real estate investment opportunities. For more information, please visit https://www.harborgroupint.com.
About Paramount Group, Inc.
Headquartered in New York City, Paramount Group, Inc. is a fully-integrated real estate investment trust that owns, operates, manages, acquires and redevelops high-quality, Class A office properties located in select central business district submarkets of New York City, Washington, D.C. and San Francisco. Paramount is focused on maximizing the value of its portfolio by leveraging the sought-after locations of its assets and its proven property management capabilities to attract and retain high-quality tenants.
Harbor Group Media Contact:
Paramount Group Media Contact:
Robert Klemens, Prosek Partners
Jason Chudoba, ICR