A state-owned firm set up to develop a Shanghai satellite town around the city’s port has found a new safe harbor for its cash, parking $42.6 million into the purchase of a six-storey office building in downtown San Francisco.
Shanghai Lingang Economic Development Group made its first overseas real estate investment during June, buying the 58,000 square foot (5,400 square metre) property at 755 Sansome Street in the city from Miami-based Market Street Real Estate Partners.
Chinese SOE Helps US Investors Make 44% Profit in 17 Months
The US investment firm had purchased the office block near the iconic Transamerica Pyramid in February 2015 for $29.5 million, and will now have realised a 44 percent profit on its investment in just 17 months.
Sansome Street Advisors and broker Rob Dumas were the seller’s representative, while Erik Hanson of JLL and June Young of Keller Williams represented Shanghai Lingang in the transaction. Reports indicate the site’s office rentals are approaching $70 per square foot and the circa 1927 building is said to be 60 percent occupied.
Shanghai Lingang was set up in 1986 to promote the development of an industrial zone around the city’s Yangshan port, however, like many Chinese state-owned entities, it has since expanded into other areas.
Besides setting up industrial and residential facilities near Yangshan port, the company has also invested in building an international movie and television production park in Shanghai, expected to open early next year.