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Wednesday, 05 December 2012

JLL REIT Buys Remaining Stake in San Francisco Office

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Commercial Real Estate Direct Staff Report

Jones Lang LaSalle Income Property Trust Inc. has acquired the 20 percent stake it didn't already own in 111 Sutter St., a 286,000-square-foot office building in San Francisco, in a deal valuing the property at $110 million, or roughly $385/sf.

The REIT, whose shares do not trade on any exchange, acquired the stake from Ellis Partners of San Francisco, which had purchased the building in 1999 with then-partner Cargill Inc. of Minnesota for $45 million.

JLL Income initially had invested in 111 Sutter, which was constructed in 1926, in 2005 when it paid $24.6 million for Cargill's 80 percent stake. The Cargill/Ellis venture had invested some $30 million in the property's 1999 renovation.

JLL Income is the successor of the former Exelsior LaSalle Property Fund Inc., an investment fund sponsored in 2004 by LaSalle Investment Management. Last year, it was converted into a non-traded REIT and launched an effort to raise up to $3 billion of fresh equity, some of which would be used to retire debt.

It paid $22 million for the remaining 20 percent stake in 111 Sutter and funded the cost with a $12 million note that Ellis took back. The loan is due Sept. 30, 2013. Separately, the property is encumbered by a $54.1 million mortgage, provided by AXA Equitable Life Insurance Co. That loan matures in July 2015.

The building is 98 percent occupied by tenants that include Northwestern Mutual Life, Ogilvy Public Relations Worldwide, Digitas and Ellis Partners.

Comments? E-mail Orest Mandzy, or call him at (267) 247-0112, Ext. 211.


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Additional Info

  • Syndicate to Realpoint: No
  • Cities: San Francisco
  • States: California
  • Sector: Office
  • Subject: Property Acquisitions (ACQ)
  • Company: Julien Studley Inc.
  • Private: No
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