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Shorenstein Lines Up Buyers for 2 Properties
Real Estate Alert
July 28, 2004 - Shorenstein Co.'s first fund has struck deals to sell the Hills Plaza office complex in San Francisco and the mixed-use Phoenix Plaza for a combined $315 million.
Morgan Stanley's Prime Property Fund agreed to pay Shorenstein $198 million for Hills Plaza in San Francisco. Meanwhile, General Electric Pension Trust has gone under contract to buy Phoenix Plaza for $117 million.
The 610,000-square-foot Hills Plaza, which encompasses the neighboring buildings at 2 Harrison Street and 345 Spear Street, was marketed by Eastdil Realty. The deal is expected to close next month.
The 215,000-sf building at 2 Harrison Street was built in 1925 as the original Hills Brothers Coffee Factory. It was renovated in 1989-the same year the 395,000-sf building at 345 Spear Street was built. The complex includes residential condominiums that are owned separately. Prime Property Fund, an open-end core vehicle established in 1973, was taken over by Morgan Stanley in November as part of its acquisition of many of the components of Lend Lease Real Estate Investments. Investors in the fund include Minnesota State Board and Vermont State Retirement.
Phoenix Plaza, at 2901-2929 North Central Avenue in Phoenix's Midtown business district, consists of two 20-story office towers, a three-story retail development and a 3,800-car garage. Secured Capital handled marketing.
GE Pension Trust of Fairfield, Conn., has lately been an active player in the office market. It sold two downtown San Diego properties for $211.5 million earlier this year via Secured.
Shorenstein bought Hills Plaza and Phoenix Plaza in 1994 as part of a $280 million four-building portfolio from U.S. West Real Estate, a subsidiary of telecommunications firm U.S. West. Shorenstein sold the other two properties in separate deals in 1998.
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