901 Battery, San Francisco

THE NORTH WATERFRONT & JACKSON SQUARE’S PREMIER CREATIVE OFFICE BUILDING _ SAN FRANCISCO, CASAN FRANCISCO

BATTERY

EXCLUSIVE ADVISOR INVESTMENT OPPORTUNITY

NGKF Capital Markets

THE OFFERING

Newmark Cornish & Carey – NGKF Capital Markets, as exclusive advisor, is pleased to present the
opportunity to acquire 901 Battery Street (the “Property”), the North Waterfront and Jackson Square’s
premier creative office building, located in San Francisco, California. Consisting of 89,904 rentable
square feet on four stories and a lower level, 901 Battery Street boasts cutting edge interior finishes,
soaring ceiling heights, abundant natural light, and unimpeded waterfront views. 96 percent occupied,
the Property features an attractive and stable income stream from a strong and diverse tenant base.
The opportunity exists to substantially increase the Property’s yield through strategic lease-up of the
second floor, rolling below market rate leases to market, and incorporating approximately 7,600 square
feet of additional square footage into rentable office space by interconnecting the ground floor and
lower level. Further, the Property includes a separate 4,100 square foot parcel used as a parking
structure with 24 spaces across the street at 998 Sansome Street which can be entitled and developed
as a boutique mixed-use project under an 84 foot height limit. The Property’s combination of strong
in-place income, significant recent building upgrades, and ability to further add value in one of the
most desirable submarkets in all of San Francisco, makes the purchase of 901 Battery Street a highly
attractive investment opportunity.

u Highly-Desirable Creative Improvements: Soaring ceiling
heights, wide open layouts, excellent water views, and
abundant natural light.

u Consistent Income Stream: Attractive in-place income from a
diverse and strong tenant roster.

u Value-Add Potential: Opportunity to increase yield and realize
future potential with strategic leasing and expansion of the
office square footage.

PROPERTY PROFILE

B U I L D I N G A D D R E S S . . . . . . . . . . . . . . . . . . . . . 901 Battery Street, San Francisco
R E N TA B L E A R E A . . . . . . . . . . . . . . . . . . . . . . . . . 89,904 Rentable Square Feet
O C C U PA N C Y . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 96 Percent
T E N A N C Y . . . . . . . . . . . . . . . . . . . . . . . . . Viscira, BAR Architects, KMD Architects
S TO R I E S . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Four, plus Lower Level
O F F I C E S I T E A R E A . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .18,906 Square Feet
F R O N TAG E S . . . . . . . . . . . . . . . . . . . . . . . . . . . Battery Street and Vallejo Street
Z O N I N G . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . C-2 (Community Business)
PA R K I N G A D D R E S S . . . . . . . . . . . . . . . . . . . . 998 Sansome Street, San Francisco
PA R K I N G S I T E A R E A . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4,120 Square Feet
S TA L LS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24 Stalls
S U B M A R K E T . . . . . . . . . . . . . . . . . . . . . . . . . .North Waterfront / Jackson Square

FINANCIAL DISTRICT

FERRY BUILDING SAN FRANCISCO JACKSON SQUARE

BATTERY 998 SANSOME PARKING
BROADWAY ST

VALLEJO ST
SANSOME ST
BATTERY ST

THE EMBARCADERO WATERFRONT
EXPLORATORIUM GREEN ST

NORTH WATERFRONT

COIT TOWER

PREMIUM CREATIVE OFFICE BUILDING WITH
AT TRACTIVE CASH FLOW

SIGNIFICANT RECENT CAPITAL INVESTMENT: Current ownership has invested $5.4 million in
substantial building improvements since 2013. These improvements include lobby and façade
renovations, base building upgrades, state-of-the-art tenant improvements, and a seismic retrofit
which put the Property’s SEL and SUL at 10% and 16%, respectively.

FULLY OCCUPIED PROPERTY: 901 Battery Street is 96 percent occupied by a diverse group of tenants
in technology, communications, and architecture that provide attractive cash flow with significant
upside as leases roll to market. With 40 percent of the tenancy rolling by 2018, and in-place tenant
rents approximately 30 percent below market, the opportunity exists to immediately improve the
Property’s yield.

HIGHLY-DESIRABLE CREATIVE IMPROVEMENTS: 901 Battery Street boasts unique features including
ceiling heights ranging from 13’8” all the way up to 15’10” on the fourth floor, large and expansive
windows, and unimpeded views overlooking the San Francisco Bay. With floor plates that average
19,000 square feet, 901 Battery Street is an ideal property for mid-sized technology tenants seeking
creative space.

SIGNIFICANT UPSIDE POTENTIAL

RECONFIGURING THE SECOND FLOOR: The second floor, which has historically been multi-tenant
occupancy, can be reconfigured as a more valuable two-tenant or single-tenant use as all of the in-
place tenants expire by the end of 2018.

PARTIAL LOWER LEVEL CONVERSION: Approximately 7,600 square feet of the lower level space can
be converted to office space by interconnecting the floors via an internal stairwell once Viscira’s lease
expires in 2020. Design concepts have already been completed for this addition.

MIXED-USE DEVELOPMENT OF PARKING STRUCTURE: Located in one of San Francisco’s most
desirable neighborhoods, the 4,120 square foot lot at 998 Sansome Street can be redeveloped as
a boutique mixed-use project featuring office, retail, and residential. A feasibility study along with
renderings have been prepared by architect Charles Bloszies.

ENHANCED VALUE FROM ROOF: The opportunity exists for a new owner to enhance the Property with
the addition of a previously approved roof deck that would take advantage of the stunning Bay views.
In addition, 901 Battery Street has the rare ability to mount rooftop dishes which is especially valuable
to media companies.

HIGHLY-DESIRABLE LOCATION

CHARMING NORTH WATERFRONT-JACKSON SQUARE NEIGHBORHOOD: Recognized for its rich
history and distinct architecture, North Waterfront and Jackson Square are among the most desirable
neighborhoods in San Francisco. These neighborhoods boast many of the City’s best restaurants and
lounges, trendy retail boutiques (Shinola, Filson, Tailor’s Keep), well-maintained parks, and quaint
streetscapes adjacent to the beautiful San Francisco Bay.

DIVERSE TENANT BASE: The North Waterfront and Jackson Square has historically been home to a
diverse tenant base including professional services, large retail companies, and media and advertising.
Increasingly, technology and venture capital firms have been moving into the neighborhood with
notable companies such as Esurance, Intel, Azure Capital Partners, and Seed Change now calling the
submarket home.

READILY ACCESSIBLE TO PUBLIC TRANSIT: The Property is readily accessible to multiple forms of
transportation including MUNI light rail and Golden Gate Transit less than one block away. BART, the
Bay Area’s main commuter rail, and the San Francisco Ferry are both about a 10-minute walk away.

SAN FRANCISCO 1Q 2017
MARKET SNAPSHOT

M A R K E T S I Z E . . . . . . . . . . . . . .78,962,807 SF
VACANCY RATE . . . . . . . . . . . . . . . . . . . . . 5.8%
C L A S S A A S K I N G R AT E S . . . . . . . . . . . $71.30
T E N A N T D E M A N D . . . . . . . . . . . 6.3 million SF

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 asking rates now stand at $71 per square foot
while vacancy remains steady at 5.8 percent. With over six million square feet of active tenant demand, the
outlook is positive for sustained growth.

NORTH WATERFRONT / JACKSON SQUARE: At a combined vacancy rate of 5.6 percent, the North
Waterfront-Jackson Square submarkets have a consistent history of strong occupancy. In recent months,
the submarket has seen an increase of activity and new leases being signed in the $70 - $80 per square
foot range.

SIGNIFICANT RECENT TENANT ACTIVITY: In the month of March, 2017 alone, leasing velocity surged in San
Francisco with Google taking 180,000 square feet at Rincon Center, Uber committing to another 500,000 square
feet in Mission Bay, and Amazon, AirBnB, and Facebook all with new substantial space requirements. Venture
capital continues to target the San Francisco Bay Area more than any other market in the U.S., investing $24.9
billion of the $58.6 billion (42 percent) of the capital commitments made in 2016.

BATTERY SAN FRANCISCO

INVESTMENT ADVISORS M I C H A E L TAQ U I N O DANIEL CRESSMAN MANDY LEE
Executive Managing Director Executive Managing Director Associate Director
KYLE KOVAC 415. 477. 920 0 415.288.3622 4 15 . 4 4 5 . 5 10 3
Executive Managing Director m t a q u i n o @ n e w m a r k c c a r e y. c o m d c r e s s m a n @ n e w m a r k c c a r e y. c o m m l e e @ n e w m a r k c c a r e y. c o m
4 15.477.9 22 0 CA License #01431337 CA License #00849877 CA License #01942461
k k o v a c @ n e w m a r k c c a r e y. c o m
CA License #01731229

LEASING ADVISORS DEBT & EQUITY ADVISOR

BART O’CONNOR R A M S E Y DAYA CHRIS MORITZ
Senior Managing Director Vice Chairman Managing Director
415.713.1818 415.399.8085 415.399.8083
b o c o n n o r @ n e w m a r k c c a r e y. c o m [email protected] ch r i s . m o r i t z @ n e w m a r k c c a r e y. c o m
CA License #01244495 CA License #01248046 CA License #01860037

NGKF Capital Markets