355 Sutter, San Francisco

PREMIER UNION SQUARE HIGH STREET RETAIL & CREATIVE OFFICE BUILDING – SAN FRANCISCO, CA

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EXCLUSIVE ADVISOR

INVESTMENT OPPORTUNITY

THE OFFERING

Newmark Knight Frank, as exclusive advisor, is pleased to present the opportunity to acquire 355
Sutter Street (the “Property”), a premier, high street retail and creative office building strategically
located in San Francisco’s Union Square District – widely recognized as one of the world’s most
prestigious luxury shopping and tourist destinations. 355 Sutter Street’s excellent location amid high-
end retailers, luxury hotels, the City’s Financial District, and multiple forms of public transit, ensures
consistently high foot traffic to the Property. Consisting of 17,915 square feet across two floors, and a
lower level, 355 Sutter Street boasts expansive ceiling heights, plentiful natural light, and a timeless
historical façade that blends seamlessly into the urban fabric of Union Square. The ground floor retail
currently consists of three separate tenant spaces, two of which are leased to both Vidal Sassoon and
Serge Sorokko Gallery with near-term expirations. Opportunities exist to futher add value, including
combining the ground floor retail, converting the lower level retail, and adding additional density. The
second floor of the building is highly desirable creative office space, recently renovated with state-of-
the art improvements, that is leased to a technology company until August 2021. 355 Sutter Street’s
excellent location in Union Square, along with its near-term value-add potential, makes the purchase of
the Property a highly attractive investment opportunity.

u 18,000 square foot high-street boutique retail and
creative office building located in world-renowned
Union Square, one block away from the new flagship
Apple Store.

u Built in 1910 and renovated in 2014, the Property blends
historical sophistication with efficiencies afforded by
modern improvements.

u Opportunities exist to further add value including
combining the ground floor retail, converting the lower
level, and adding additional density.

PROPERTY SUMMARY

B U I L D I N G A D D R E S S . . . . . . . . . . . . . . . . . . . . . . 355 Sutter Street, San Francisco
R E N TA B L E A R E A . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17,915 Square Feet
U S E . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Mixed-Use Retail and Office
S TO R I E S . . . . . . . . . . . . . . . . . . . . . . . Two Stories, plus mezzanine and lower level
T E N A N C Y . . . . . . . . . . . . . . . . . . . . Vidal Sassoon, Serge Sorokko Gallery, Educents
O C C U PA N C Y . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 67%
F R O N TAG E S . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Sutter Street
S I T E A R E A . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5,998 Square Feet
Z O N I N G . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . C-3-R (Downtown Retail)
HEIGHT & BULK . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 80-130-F
SUBMARKET . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Union Square

RETAIL
HOTEL

T
T

T

FINANCIAL DISTRICT DOLCE & GABBANA
LONGCHAMP
WEST COAST’S

FINANCIAL CAPITAL

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LOUIS VUITTON T

BURBERRY JIMMY CHOO UNION SQUARE
TOURBILLON CHANEL

HERMES BULGARI WORLD-CLASS SHOPPING
APPLE
CARTIER AND TOURISM

CAMPTON PLACE TIFFANY & CO NEIMAN MARCUS POWELL STREET
MACY’S

WILLIAMS-SONOMA HOTEL NIKKO

SAKS FIFTH AVENUE

SUTTER STREET THE WESTIN ST. FRANCIS
BUSH STREET
CABLE KIMPTON SIR FRANCIS DRAKE
CAR

MARRIOTT UNION SQUARE

JW MARRIOTT UNION SQUARE

HILTON UNION SQUARE

PREMIUM MIXED-USE ASSET

HIGH-STREET CURB APPEAL: Benefiting from expansive window lines, with three separate retail bays
fronting Sutter Street, 355 Sutter Street is positioned amidst San Francisco’s most highly trafficked
pedestrian and tourist district.

CUTTING-EDGE CREATIVE OFFICE IMPROVEMENTS: The office space in 355 Sutter Street boasts
highly attractive features including soaring ceiling heights, large and operable windows, ample natural
light, and a timeless historic façade - attributes that are desirable by both retail and office tenants alike.

RECENT RENOVATION: The upper floor office was recently outfitted with the latest state-of-the-art
creative improvements with approximately $100 per square foot invested in the space.

JEWEL BOX PROPERTY FOR OWNER USER: The Property’s timeless historic façade, which consists of
ornate columns crowned with Greek capitals, combined with the ability to occupy both the retail and
office space in the coming years, make the acquisition of 355 Sutter Street attractive to both office and
retail owner user investors.

CLEAR PATH TO ADD VALUE

BELOW MARKET RENTS: In-place tenants are substantially below current market rents, allowing for
the opportunity to significantly increase yields in the near-term. Once Vidal Sassoon’s lease expires
in January 2019, a new owner will be able to renew them or re-lease the space at market rents, or
combine the ground floor retail spaces. Educents, the office tenant on the second floor, will expire in
August 2021, enabling a new owner to lease the premium office space at market rents.

REPOSITIONING OPPORTUNITY: The potential could exist for a new owner to combine the ground floor
retail space into one 6,000-square feet space with 50 feet of prominent frontage along Sutter Street.
The new space is ideal for a prime retail tenant seeking a strategic location in a high visibility area.

REDEVELOPMENT POTENTIAL: 355 Sutter Street has the potential to increase density on top of the
existing building envelope. The Property’s underlying zoning, Downtown Retail (C-3-R) and height limit
of 80 to 130 feet, may permit additional stories for office, hotel, or residential.

LOWER LEVEL CONVERSION: The lower level consists of 5,009 square feet of space that can be
converted into usable retail space in conjunction with the ground floor tenancy.

WORLD-CLASS UNION SQUARE LOCATION

WELL-POSITIONED UNION SQUARE ASSET: 355 Sutter Street is just one block away from the world-
famous Union Square in the heart of the neighborhood. As one of the world’s most prestigious shopping
districts, Union Square boasts hundreds of luxury, department, and boutique retail stores including
Apple, Louis Vuitton, and Neiman Marcus, and Hermes. Additionally, dozens of major hotels anchor
Union Square as a prime tourist destination.

ADJACENT TO NEW APPLE STORE: Apple opened their new location at 300 Post Street, one block
away from 355 Sutter Street, following a substantial $30 million renovation of the building formerly
occupied by Levi’s. The new flagship store, which incorporates the latest innovations in building design,
has significantly increased pedestrian traffic to the area.

PUBLIC TRANSIT & PARKING OPTIONS: Well-served by public transit, 355 Sutter Street is just two
blocks away from the under construction Union Square Central Subway Station that is expected to
open in 2019. The Property is three blocks away from MUNI light rail on Market Street and a short
distance from Powell Street BART Station. Across the street is the 1,865-stall Sutter Stockton Garage,
one of the largest parking garages in San Francisco, which serves as a starting point for many visitors
to Union Square and ensures consistent foot traffic to the Property.

EXCELLENT MARKET FUNDAMENTALS

STRONGEST MARKET IN THE UNITED STATES: San Francisco continues to be the top performing tenant
and investment market in the United States. Average Class A office asking rates now stand at $76 per
square foot while vacancy remains steady at 5.8 percent. With over 5.5 million square feet of active tenant
demand, the outlook is positive for sustained growth.

OFFICE LEASING MOMENTUM: 2017 was an exceptionally strong leasing year in the office market with
the most ever 100,000 square foot transactions. Technology companies continue their unprecedented
growth with companies such as Dropbox, Facebook, Google, Amazon, Airbnb, and Uber making historic
commitments to expand in San Francisco.

TIGHT UNION SQUARE MARKET: As of Q4 2017, retail vacancy in Union Square stands at just 3.8 percent.
In the last five years, vacancy has remained sub-4 percent, reflective of the high demand for prime retail
space. Rental rates for premier ground floor retail space facing the landmark square and in some of the
blocks surrounding it can range between $500 to $700 PSF/Yr.

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OFFICE INVESTMENT ADVISORS RETAIL INVESTMENT ADVISORS

KYLE KOVAC M I C H A E L TAQ U I N O NICHOLAS BICARDO BRANDON ROGOFF
Executive Managing Director Executive Managing Director Vice Chairman Director
4 15.477.9 22 0 415. 477. 920 0 4 15 . 4 4 5 . 5 17 2 415.445.5163
[email protected] m t a q u i n o @ n g k f. c o m [email protected] [email protected]
CA License #01731229 CA License #01431337 CA License #01380524 CA License #01949914

DANIEL CRESSMAN MANDY LEE DEBT & EQUITY ADVISORS LEASING ADVISOR
Executive Managing Director Director
415.288.3622 4 15 . 4 4 5 . 5 10 3 CHRIS MORITZ ANNE MARIE CECCONI
[email protected] [email protected] Managing Director Vice President
CA License #00849877 CA License #01942461 415.399.8083 415.288.7831
[email protected] [email protected]
CA License #01860037 CA License #01871852