Harel Insurance Investments and Financial Services Ltd. (TASE: HARL) has purchased an equity interest in another office building in San Francisco at a gross implied value of $402 million. Harel will own a 49% stake in the property, which is located in the south financial district of the city's Central Business District. Harel's equity investment will be $110 million.
The property is a 26-floor Class A office building covering 400,000 square feet. A significant portion of the building is leased to an international accounting firm, and the remaining areas are mainly leased to tech companies, law firms, accounting firms and service providers. The building is leased at an occupancy rate of 87%, and the property's business plan includes marketing the vacant areas, some of which are in advanced talks. There is also a capital investment plan that will allow a major increase in rents.
This is Harel's sixth West Coast deal in recent years and the third office building investment in San Francisco, with the two previously acquired buildings also in the city's central business district. San Francisco's office market is a strong submarket that attracts tech companies.
Harel is joined in this latest deal by a publicly traded US REIT, with an enterprise value of over $8 billion and extensive local knowledge of the market. The parties have reviewed and executed several joint transactions in the past.
Harel's investments are managed by chief investment officer Sami Babkov
Published by Globes, Israel business news - en.globes.co.il - on August 27, 2019
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