Office Market Shows Signs of Life

That sound of air rushing out of the financial district is a collective sigh of relief from the folks at Tishman Speyer. Regulatory filings for the company’s Australian-based US office property investment fund show that the office market may be on track to a recovery. Two of the fund’s properties are located here in San Francisco: One Bush Street and 595 Market.

Independent valuations place the value of One Bush at roughly $100 million, or $331 per square foot, while 595 Market appraised for roughly $124 million, or $289 per square foot. All of this is meaningless, however without context. These current appraisals put both properties four percent above 2009 values. Despite this good news, One Bush remains nearly 30 percent below its 2008 peak, while 595 Market is a much more modest eight percent below 2008. Tishman originally bought One Bush for $339 per foot in 2003, showing some hole left to dig out of.

The brokerage community also let out some air this month, as Ellis Partners closed on the acquisition of 303 Second Street for $287.26 per square foot, representing the first non-distressed office property to change hands in over a year.

SF Business Journal


~ by awietstock on June 10, 2010.

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