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Invesco Acquires Downtown S.F. Office Tower From Hines

Deal For Downtown Building One of Richest of Last Several Years In City By the Bay
January 13, 2014
In a transaction that reflects San Francisco's standing as one of the world's priciest real estate markets, Invesco Real Estate announced it purchased 101 Second St., a 26-story, 388,370-square-foot office tower in the city's South Financial District.

A subsidiary of the Hines U.S. Core Office Fund LP closed the sale of 101 Second Street. Financial terms of the deal were not disclosed, but the price has been reported at just under $300 million - the highest dollar amount and price per square foot paid for a single San Francisco office property in over a year.

"Although we're very proud of the building and the performance we've been able to achieve for our investors at 101 Second Street, we have decided that this is a good time to sell the asset," said Ken Jett, managing director with Hines’ Core Fund, which acquired the building in 2004 for $140.6 million, or $362 per square foot.

The South Financial District has improved significantly over the past 10 years, and "I expect that it will continue to improve for the new owners of the building," said George Clever, senior managing director in Hines’ West Region.

Invesco Real Estate's parent, Atlanta-based investment manager Invesco Ltd., had $767.3 billion of assets under management as of Nov. 3.

Bill Grubbs, managing director of Invesco Real Estate, added that the building is a strong addition to the national portfolio of the real estate arm, which manages $54.3 billion in real estate investments, including $31.3 billion in direct investments and $23 billion in securities.

Built in 2000 and designed by architects Skidmore, Owings & Merrill, 101 Second Street is 90.6% occupied, according to CoStar information.

CBRE advised Hines on the transaction. For more information, please see CoStar COMPs #321020.

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