The Carlyle Group, through a joint venture with Cypress Equities, has acquired the stalled CityPlace retail project at 935-965 Market Street in San Francisco from Dallas-based private equity real estate firm Lone Star Funds. The Washington, DC-based alternative asset manager will serve as the lead equity partner in the development of a six-level, 250,000-square-foot retail property, which has been renamed Market Street Place.
Terms of the deal were not disclosed, but Carlyle and Cypress went under contract last month to purchase the site for a rumoured $23 million, according to data provider Real Capital Analytics. The partnership beat out a large group of bidders that included Houston-based Hines, according to an article in the San Francisco Business Times.
“This desirable location just steps from public transportation provides destination retail options for shoppers in the heart of San Francisco. We are pleased to again team with Cypress Equities, which has a successful track record in retail development and project management,” said Paul Brady, managing director at Carlyle, in a statement.
Lone Star acquired the defaulted construction loan backed by the CityPlace project through its purchase of the US loan book of Anglo-Irish Bank in last fall and subsequently took title to the site through foreclosure. The original developer of CityPlace, San Francisco-based Urban Realty, lost the property following the bankruptcy of its equity partner, Commonfund Realty, according to the San Francisco Business Times.
Market Street Place – slated to break ground this fall and open during the first quarter of 2015 – is the latest joint venture between Carlyle and Cypress, which previously have partnered on 24 different real estate deals, including mixed-use and large-scale retail projects within the US. Most recently, the pair teamed up for the mixed-use development at West 7th in Fort Worth, Texas, and the Village at Leesburg in Leesburg, Virginia.