Seavest gains approval for major downtown San Francisco medical office conversion
SAN FRANCISCO and WHITE PLAINS, N.Y. (PRWEB) March 11, 2019 -- When Seavest Healthcare Properties LLC decided to acquire its first property in San Francisco – 939 Ellis in the desirable Cathedral Hill area, flanking the high-growth Van Ness Corridor – company executives knew they would face challenges.
But the White Plains, N.Y.-based real estate investment firm went ahead with the acquisition, assembling a local team to study and then navigate the challenges – not the least of which was changing the use of the property from commercial office to medical.
Those efforts paid off March 7 as the San Francisco Planning Commission voted unanimously to approve Seavest’s application for a health services conditional use authorization for the building.
Now it’s “full speed ahead” for Seavest to fulfill its vision of converting the vacant former office building into a 100 percent institutional-quality multi-tenant medical office building (MOB) leased by the highest-quality healthcare companies.
John Winer, Seavest Chief Investment Officer, said the acquisition and repurposing of 939 Ellis fits well with the firm’s long-range goals and business plan.
“Seavest has been actively seeking to grow its portfolio in the western United States. This acquisition now gives us a toehold in the robust San Francisco market, and we are eager to acquire other buildings or partner with developers to grow our asset base in the Bay Area.”
The seven-story 939 Ellis, which Seavest acquired in June 2018, consists of 87,189 square feet of rentable office space, and 53 parking spaces.
David Braunstein, Seavest Vice President of Acquisitions, said the acquisition of 939 Ellis was a unique opportunity in San Francisco’s tight commercial real estate market.
“It’s very difficult for healthcare providers to obtain large blocks of space in San Francisco because of low vacancy rates, high rents and city restrictions limiting new development,” says Mr. Braunstein. “That’s why this was a compelling opportunity.”
He added, “In acquiring the building, we knew we faced obstacles, including obtaining governmental approval for a health services conditional use permit for the building. We developed a very focused plan to deal with the regulatory process and were successful.”
Mr. Braunstein said an important factor in Seavest’s decision to acquire the property is the strong tenancy. “The previous owner secured a commitment from Kaiser Permanente for a long-term lease of about 50 percent of the rentable space for a behavioral health initiative,” he explains. “Kaiser is one of the leading healthcare providers in the country, so we’re pleased to have them as the anchor tenant. We are also meeting with a number of other prospective tenants that are well-known healthcare leaders.”
Mr. Braunstein noted the property is in the Van Ness Corridor, a high-traffic thoroughfare which is easily accessible from the city and the northern suburbs and that is becoming a medical destination. The building is just three blocks from the newly opened one million square foot, 274-bed California Pacific Medical Center.
In addition, 939 Ellis has easy access to Bay Area transit, including MUNI bus lines, BART and the future Van Ness Bus Rapid Transit. The property is surrounded by new high-rise residential complexes, cultural centers, retail stores, restaurants, the civic center, city hall and some of the most well-known technology companies in the world.
Mr. Winer said the previous owners of the building – 939 Ellis LLC, a joint venture of San Francisco-based Long Market Property Partners and Seattle-based Columbia Pacific – significantly enhanced the property through a $10.8 million capital improvement program. This included modernizing the exterior façade; renovating the main lobby and roof deck; replacing part of the roof; installing Americans with Disabilities Act (ADA) upgrades; and upgrading the common area restrooms, elevator lobby, and elevator finishes. Seavest now plans to invest another $1.8 million in the building, which will include elevator modernizations, a new building management system, a new HVAC system and more.
“There is strong interest in the remaining space in the building,” says Mr. Winer. “We have more than 40,000 square feet of contiguous space available, which is rare in San Francisco. We’re also able to offer larger floor plates in the building – almost 14,000 square feet of space per floor – which most prospective tenants can’t find in the downtown San Francisco market. Together with the fully renovated common areas, superior location and tenant parking, 939 Ellis is a very desirable location for healthcare providers.”
Full-service real estate developer and investor Meridian, which is headquartered in San Ramon, Calif., is serving as the firm’s local market consultant.
Additional space for healthcare-related tenants is available in the building. For leasing information and space availability at 939 Ellis, please contact Sid Ewing of Colliers at (510) 433-5889 or [email protected] or Angie Weber of CBRE at (818) 502-6750 or [email protected].
About Seavest Healthcare Properties LLC
Seavest Healthcare Properties LLC is a real estate investment management firm focused on the medical office and outpatient facility sector. The firm acquires existing properties, joint ventures with established developers to build new properties, and asset manages medical office buildings, outpatient facilities and similar healthcare real estate assets. A pioneer in this sector, Seavest made its first healthcare real estate investment in the mid-1980s. Today, the firm has a significant portfolio of medical office and outpatient properties located throughout the United States. For more information, please visit http://www.SeavestHCP.com or call (914) 683-8474.
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Erin Molloy, Seavest Healthcare Properties LLC, http://www.seavesthcp.com, +1 (914) 683-8474, [email protected]
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