San Francisco — Hudson Pacific Properties Inc. (NYSE: HPP) and Allianz Real Estate have formed a joint venture to acquire the Ferry Building in downtown San Francisco.
Located at the foot of Market Street along the San Francisco Bay waterfront, the landmark features 192,532 square feet of office space and 75,486 square feet of retail space.
Equity Office, an affiliate of the Blackstone Group, sold the leasehold interest in the land and improvements to the Ferry Building to the joint venture for $291 million. The remaining term on the ground lease, which is owned by the Port of San Francisco, is 49 years.
The Ferry Building is fully leased to companies including SS&C Technologies Inc., Meltwater Inc., Meritage Group LP and Niantic Inc., as well as restaurants and retail tenants such as The Slanted Door and Blue Bottle Coffee.
The Ferry Building also plays host to the Ferry Building Marketplace, a public food market that is organized along an indoor street known as the Nave. The food market attracts more than 8.8 million annual visitors.
Hudson Pacific owns a 55 percent interest in the joint venture and will serve as the managing member and day-to-day operator of the property, while Allianz owns a 45 percent interest. The all-cash transaction was approved by the Port of San Francisco and is expected to close this week.
“Since it opened in 1898, the Ferry Building has been preserved and improved, evolving into a great architectural achievement,” says Christoph Donner, CEO of Allianz Real Estate of America. “It is our intent to protect and enhance the Ferry Building’s stature, vitality and contributions to the community.”
Hudson Pacific Properties is a Los Angeles-based REIT that owns and operates more than 17 million square feet of office and studio properties on the West Coast. The company’s anchor tenants include Google, Square, Uber and NFL Enterprises.
Hudson Pacific’s stock price closed at $32.61 per share on Monday, Oct. 8, down from $33.10 a year ago.
Allianz Real Estate is a real estate investment and asset management firm within the Allianz Group, a global financial services and insurance firm based in Germany. Allianz Real Estate has roughly $64.2 billion of assets under management.
— John Nelson