The Canada Pension Plan Investment Board (CPPIB) will complete its first investment in San Francisco office real estate with the partial purchase of a Class A tower on 1455 Market Street for US$219.2 million.
Hudson Pacific Properties, which acquired the property in 2010, will retain 55 per cent ownership and continue to oversee management and leasing.
Currently the global headquarters for ride-sharing service Uber and mobile payments and merchant services company Square, the 22-storey concrete building faces an entire block along 11th Street in San Francisco’s Mid-Market neighbourhood.
Peter Ballon, CPPIB managing director and head of real estate investments in the Americas, said the company looks forward to building its relationship with Hudson and expanding its office portfolio on the West Coast.
Built in 1976, the former data centre for Bank of America has undergone major renovations while under Hudson’s management.
Victor Coleman, Hudson’s chairman and chief executive officer said his team leased the property’s vacancy to “top-tier technology companies, which signed long-term leases and built out incredible spaces.”
“A joint venture with CPPIB unlocks a significant portion of the value created for shareholders to date, and lays a strong foundation for our firms to explore additional investment opportunities together,” Coleman said.
The 1,025,833-square-foot property, which houses ground-floor retail, will be expanded early this year to target high-end retail and restaurant users.
Some proceeds from the joint-venture may be used to help fund Hudson’s US$3.5 billion deal to buy a portfolio of properties from Blackstone Real Estate Funds.