A joint venture between Invesco Real Estate and Hines finalized its purchase of the Rialto Building, a nine-story, 131,344-square-foot office building at 116 New Montgomery St. in San Francisco’s south financial district. A group led by Africa Israel USA sold the turn-of-the-century property for approximately $434 per square foot or $57 million.
Built in 1902 at the intersection of Mission and New Montgomery streets, the building was both updated to modern office standards and its original architectural features restored by AFI USA following its acquisition of the property in 2007, including the main lobby's bronze staircase, ornate metal elevator doors, painted panel ceiling and marble flooring.
Eastdil Secured was hired to list the property in late January and 17 offers were received as part of the bidding process.
“We were very pleased with the widespread interest in the building, which we feel is indicative of the Rialto’s strengths, both architecturally and geographically,” said Damien M. Stein, director of asset management at AFI USA. “The demand for premier office space in the most sought-after area of San Francisco is clearly outpacing the ready supply.”
Major tenants include Trulia, Nelson\Nygaard and LaunchSquad in the 85 percent occupied building. Walgreens and Chipotle occupy ground floor retail space on long-term leases. Hines will oversee management and leasing of the property on behalf of the partnership.
According to Cameron Falconer, a senior managing director at Hines, the buyers intend to continue to invest in the building to complete its transition to a ‘creative core’ asset that caters to technology and multimedia tenants.
Africa Israel Investments is an international holding and investments group. AFI USA, its New York-based subsidiary, owns the New York Times Building, the Clock Tower and the Apthorp residential building.
Editor's note: The article was updated to include the sale price.