The California Department of General Services has selected a partnership between Hines and Antarctica Capital Real Estate to purchase and leaseback eleven (11) state owned properties for $2.33 billion including the San Francisco Civic Center and Public Utilities Commission Building at 505 Van Ness Avenue.
The state will receive 20-year market rate leases on the portfolio of buildings.
penny wise, pound foolish.
This may be penny wise and pound foolish or it may not be. Too early to tell. The price they received was higher than expected. There is a glut of commercial property that the state could lease right now — who knows what the needs will be in 20 years, but it may (or may not be) a buyer’s market for this type of space. Sacramento is full of empty commercial and government space. We’re paying off over a billion dollars in bonds on the buildings with the sale proceeds, so that cost is saved. And govt workers cost way, way more to maintain a building than comparable private workers.
So this could be a great financial move. Or, if the state negotiates poor leases or if the market is tight in the future, it could be a terrible deal. We don’t know yet.
These buildings will then be on the local Tax rolls
Dumb idea. This is short-term thinking with bad long-term consequences.
Great. So, this is pretty much like borrowing a bunch of money, except that after twenty years, instead of being paid off, the rent goes up.
Brilliant!
Stupid is as stupid does.
Should have sold them to CalPERS and kept it all in the “family”
Desperate times call for stupid measures by shortsighted people.
I work but don’t live in the city-what exactly constitutes the Civic Center? The park? City Hall? Bill Graham? Asian Art?
Thx
curious newbie, the press has been awfully poor on that one. I assume they mean the state’s civic center complex at 455 Golden Gate.