Beijing-based Sino-Ocean Land has become the latest Chinese developer to bet on the Bay Area real estate market, after the state-owned giant bought a San Francisco office asset from Goodwin Gaw’s Downtown Properties, according to an account in TheRegistry.com.
Sino-Ocean, which is owned by food processing conglomerate COFCO, has reportedly purchased 1161 Mission Street, a 65,000 square foot (6,039 square metre) office building in San Francisco’s SOMA area, joining a number of its mainland competitors in buying into one of the city’s fastest developing commercial districts.
The deal is Sino-Ocean’s first acquisition in the Bay Area, and is the company’s first publicly acknowledged direct investment in US real estate, after previously backing investments in the Sydney market.
WeWork Helps Fill Up Former SF Industrial Space
Hong Kong-listed Sino-Ocean, is paying the equivalent of $640 per square foot for the building at 1161 Mission Street, which is currently anchored by a WeWork centre, according to the local media account, citing sources familiar with the transaction.
Downtown Properties had acquired the four-storey building for $19.3 million in 2011, according to local press reports at the time. That acquisition came following a complete renovation of the one-time industrial building, which was then completely unoccupied. Listings from property consultants in the Bay Area show that at least 10 percent of the property is currently vacant, with asking rentals averaging over $66 per square foot per year.
The property is part of an extensive portfolio of California assets owned by Los Angeles-based Downtown Properties. The company’s managing principal, Goodwin Gaw, who founded Downtown Properties in the 1990s, is also the founder and chairman of Hong Kong-based real estate investment firm Gaw Capital Partners.
Downtown Properties also controls the 300 Montgomery and 550 Montgomery office buildings in San Francisco, as well as the Bradbury Building in Los Angeles, among its collection of 12 properties in the Golden State.
Sino-Ocean Will Find Familiar Neighbors in San Francisco
Sino-Ocean’s new US foothold is in the South of Market, or SOMA, neighborhood, which has quickly become a favorite among high tech firms, pulling in top occupiers such as Twitter and Salesforce.com helping to drive an office boom in the area.
1161 Mission is less than 1.5 miles from the Lumina condo tower, where China Vanke pioneered Chinese investment in US real estate in 2013. The leading mainland developer doubled down on SOMA in March of this year when it bought a pair of commercial buildings at 657 and 667 Mission Street for an undisclosed sum.
In 2015, China Oceanwide, another Beijing-based developer, spent $296 million to buy First and Mission, a two million square foot (186,000 square metre) mixed-use project just over one mile up the road from Sino-Ocean’s new property.