401 Washington, San Francisco

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EXCLUSIVE ADVISOR

INVESTMENT OPPORTUNITY

THE OFFERING

Newmark Knight Frank, as exclusive advisor, is pleased to present the opportunity to acquire 401 Washington
Street (the “Property”), a premier boutique office building located in San Francisco’s North Financial District.
Consisting of 15,923 rentable square feet on seven stories and a lower level, 401 Washington Street is
prominently located at the corner of Washington and Battery Streets. All floors benefit from abundant natural
lighting afforded by floor-to-ceiling bay windows along 120 feet of street frontage along Washington Street.
100 percent occupied, 401 Washington Street generates attractive cash flow from in-place tenants with
additional upside as leases roll to market. A large billboard facing Battery Street and a Verizon antenna
on the roof provide attractive income to the Property with minimal management and oversight. In addition,
401 Washington Street’s prime location in the North Financial District is saturated with amenities including
many of San Francisco’s best restaurants, cafes, and retailers and also allows for convenient access with
BART and MUNI stations just a short 10-minute walk away. The combination of strong in-place income with
further upside as leases roll to market, and a quality, well-maintained building in one of the most desirable
submarkets in San Francisco makes the purchase of 401 Washington Street a highly attractive investment
opportunity.

u 15,923 rentable square foot boutique office and retail
building located in the North Financial District.

u 100 percent occupied by tenants that offer stable cash
flow with the opportunity to increase yield as below
market rate leases expire.

u Prominently located with significant frontage along
Washington Street and considerable income from
signage and rooftop antenna.

PROPERTY PROFILE

ADDRESS . . . . . . . . . . . . . . . . . . . . . . . 401 Washington Street, San Francisco
LEASABLE AREA . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15,923 Square Feet*
LEASABLE AREA (ABOVE GROUND) . . . . . . . . . . . . . . . . . . . . 14,518 Square Feet
OCCUPANCY . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 100 Percent
STORIES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Seven, Plus Lower Level
SITE AREA . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2,425 Square Feet
FRONTAGES . . . . . . . . . . . . . . . . . . . . . . Washington Street and Battery Street
ZONING . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . C-3-O (Downtown Office)
SUBMARKET . . . . . . . . . . . . . . . . . . . . . . . . . . . . . North Financial District

*Lower level includes an additional 320 square feet of space for Trash and Janitorial Storage. Leasable Area represents BOMA
usable square footage plus an 8% load factor above the first floor.

AT&T PARK SALESFORCE TOWER

181 FREMONT

FINANCIAL DISTRICT

MARKET STREET shingtwa BATTERY STREET TRANSAMERICA PYRAMID
TRANSAMERICA REDWOOD PARK
SUE BIERMAN PARK 401 on

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WASHINGTON STREET

SYDNEY G. WALTON SQUARE PARK

ATTRACTIVE CASH FLOW WITH NEAR-TERM UPSIDE

STABILIZED PROPERTY: The Property is currently 100 percent occupied with a strong tenant mix. Approximately
50 percent of the tenancy has been at 401 Washington Street for more than two decades, highlighting tenants’
long-term commitment to the Property.

BELOW MARKET RENTS: In-place tenants at 401 Washington Street are approximately 30 percent below
market, allowing for significant increase in cash flow upon lease expirations. Nearly two-thirds of current leases
will roll to market in the first two years of the hold period.

DIVERSIFIED INCOME SOURCES: In addition to income from the office and retail tenants, the Property also
generates significant income from a large billboard facing Battery Street leased to CBS Outdoor and a rooftop
antenna leased to Verizon Wireless.

CONSISTENTLY AT FULL OCCUPANCY: 401 Washington has consistently operated at 100 percent occupancy
with few exceptions. Over the past 20 years, occupancy has never dropped below 90 percent average for the
year, and it has typically taken less than three months to lease the Property back up to 100 percent occupancy.

100% 30% 64%

OCCUPIED IN PLACE TENANTS OF LEASES
BELOW MARKET EXPIRING BY EOY
RENT
2019

PREMIER DOWNTOWN SAN FRANCISCO OFFICE BUILDING

FULL FLOOR TENANCY: 401 Washington Street benefits from highly efficient floor plates averaging 2,168
square feet that allow office tenants to fully occupy a single floor.

PROMINENT IDENTITY: Prominently located at the corner of Washington and Battery streets, 401 Washington
Street boasts a striking glass wall of full floor-to-ceiling windows stretching across the building’s seven stories.

WELL-MAINTAINED BUILDING: Built in 1983, 401 Washington Street has been exceptionally well-maintained
over the years with minimal need for additional improvements.

OFFICE CONDOMINIUMS: 401 Washington Street is mapped for office condominiums, allowing a new owner
to market and sell individual floors to users or investors and diversify their investment strategy.

RESIDENTIAL CONVERSION POTENTIAL: With 2,168 square foot floor plates in one of the City’s most
desirable neighborhoods, 401 Washington Street is ideally suited for a conversion into luxury residences.

IRREPLACEABLE NORTH FINANCIAL DISTRICT LOCATION

WORLD-CLASS LOCATION: The North Financial District is one of San Francisco’s most desirable and
recognized addresses, boasting a number of landmark buildings including the Embarcadero Center, the historic
Ferry Building, and the iconic Transamerica Pyramid – a prominent focal point of the San Francisco skyline. 401
Washington Street is centrally located, just blocks from these landmark locations.

EXCEPTIONAL AMENITY BASE: 401 Washington Street benefits from the numerous and wide-range of
amenities at its doorstep, which includes over a hundred highly acclaimed restaurants, cafes, and bars that are
among San Francisco’s best. Nearly half-a-dozen hotels including the Le Meridien, Loews Regency, and Hilton are
within a five-minute walk from the Property. In addition, two new hotels are proposed nearby at 447 Battery Street
and 439 Washington Street that would add 370 new rooms to the area.

UNMATCHED TRANSPORTATION ACCESS: The Property is conveniently located less than a 10-minute walk
away from Embarcadero and Montgomery Street Stations, both which serve BART and SF MUNI lines. Over a
dozen SF MUNI and Golden Gate Transit (serving Marin County) bus lines stop within blocks of the Property.

100+ 6+ 10

RESTAURANTS, MAJOR HOTELS IN MINUTE BART WALK
CAFES, AND THE IMMEDIATE TO MAJOR BART
LOUNGES AREA
AND MUNI STATIONS

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, driven by more than 6 million square feet of tenant demand.
Average Class A asking rates now stand at $74 per square foot while vacancy remains steady at 6.1 percent.

NORTH FINANCIAL DISTRICT: The North Financial District is consistently one of San Francisco’s most
desirable submarkets with overall Class A asking rents of $76 – the highest in the City – representative of the
strong tenant demand.

SIGNIFICANT RECENT TENANT ACTIVITY: Through July 2017, leasing velocity has surged in San Francisco
with Airbnb taking 300,000 square feet at 650 Townsend Street, Google taking 180,000 square feet at Rincon
Center, Amazon taking 175,000 square feet at 525 Market Street, Uber committing to another 500,000 square
feet in Mission Bay, and Facebook with a new substantial space requirement. Venture capital continues to target
the San Francisco Bay Area more than any other market in the U.S., investing $7.7 billion of the $18.3 billion
(42 percent) of the capital commitments made year-to-date in 2017.

SAN FRANCISCO 2Q 2017
MARKET SNAPSHOT

M A R K E T S I Z E . . . . . . . . . 78,790,888 SF
VACANCY RATE . . . . . . . . . . . . . . . 6.3%
C L A S S A A S K I N G R AT E S . . . . . . . $74.16
T E N A N T D E M A N D . . . . . . . . 6.2 million SF

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INVESTMENT ADVISORS MICHAEL TAQUINO DANIEL CRESSMAN MANDY LEE
Executive Managing Director Executive Managing Director Associate Director
KYLE KOVAC 415.477.9200 415.288.3622 415.445.5103
Executive Managing Director mtaquino@newmar kccarey.com dcressman@newmar kccarey.com mlee@newmar kccarey.com
415.477.9220 CA License #01431337 CA License #00849877 CA License #01942461
kkovac@newmar kccarey.com
CA License #01731229

DEBT & EQUITY ADVISORS LEASING ADVISOR

RAMSEY DAYA CHRIS MORITZ MATT BRASLER
Vice Chairman Managing Director Finlay Pacific
415.399.8085 415.399.8083 415.820.5297
ramsey.daya@newmar kccarey.com chris.moritz@newmar kccarey.com [email protected]
CA License #01248046 CA License #01860037 CA License #01260686