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AREA to sell SF office to Ohio Teachers

The New York-based real estate investment firm is in contract to sell a San Francisco office tower to the State Teachers Retirement System of Ohio for $238 million.


AREA Property Partners is looking to sell the building that houses BlackRock’s San Francisco offices to the State Teachers Retirement System of Ohio (STRS), PERE understands. According to information from data provider Real Capital Analytics, the New York-based real estate investment firm is in contract to sell Foundry Square I to the $66.8 billion Ohio retirement plan for $238 million. 

Completed in 2007, Foundry Square I is a 335,000-square-foot office property at 400 Howard Street in San Francisco. The 10-storey building initially served as the headquarters for Barclay’s Global Investors. When BlackRock bought Barclay’s in 2009, the New York-based asset management giant became the property’s sole tenant. BlackRock’s current lease runs for another 10 years.

Foundry Square is a complex of four architecturally-linked, 10-story mid-rise buildings located at Howard and First streets in the South of Market neighbourhood of San Francisco. Each of the four buildings stands on a different corner of the street and has different owners.

According to a report from Bloomberg, AREA took control of the property in late 2009 as part of a portfolio of five San Francisco office buildings previously owned by Morgan Stanley Real Estate Investing (MSREI), which originally had acquired the properties on behalf of Morgan Stanley Real Estate Fund V. AREA took over the portfolio after MSREI defaulted on mezzanine debt backed by the properties. 

None of the other buildings in the portfolio are Foundry Square offices, and RCA lists the remaining assets in the portfolio as under the ownership of AREA. It is unclear at this time what AREA plans to do with the remaining properties in the portfolio, which include One Post Street, 201 California Street, 60 Spear Street and Bayside Plaza. AREA declined to comment.

As of press time, Ohio STRS did not return calls seeking comment.