Monday, October 5, 2009

Ritzy Retail Condos Fetch $1,419 PSF

SAN FRANCISCO-The three retail condominiums anchoring the $90-million Ritz-Carlton Residences at 690 Market St. have changed hands for $7.4 million in cash, which translates to $1,419 per square foot, the highest per-square-foot price the market has seen this year. The spaces total 5,223 square feet and are fully leased on 10-year terms to Wachovia, which consolidated two spaces, and Victoria Pastry Co., according to CB Richard Ellis, which co-listed the units with Verde Pacific.

The commercial condos sit below 100 residential condos, half of them whole ownership and half of them fractional ownership. The seller was the developer, R.C. Chronicle Building LP, a partnership that includes the Ritz-Carlton Hotel Company LLC and Hunter Group. The new owners are local high-net-worth individuals Che Chen Liu and Shu Fin Liu, for whom the investment completed a 1031 exchange.

CB Richard Ellis brokers Don LeBuhn, Trevor Thorpe, and Kevin Kovar represented the seller in partnership with Nora Vigil and Melanie Guevara of Verde Pacific. Kevin Colombo and Dean Copans of RetailWest represented the buyers.

A representative of the new ownership tells GlobeSt.com in an email that the original asking price for the retail condos was $11. 5 million and that the purchase price represents a cap rate of "just under" 8%. The nearby Union Square building anchored by Joe’s Jeans sold at a cap rate in the 7% range earlier this year and a retail condo leased to Lululemon Athletica sold late last year at a 6.6% cap, according to the local brokerage sources.

There have been only a handful of retail investment sales above $6 million since the third quarter of 2007, according to listings on Real Capital Analytics.

Source, GlobeSt.com