Shanghai firm buys SF office building

San Francisco is one of the hottest real estate markets in the US, and a Chinese company, Shanghai Lingang Economic Development, has purchased a downtown office building for $42.6 million.

"They view San Francisco as a very desirable place to make their first investment in the US. It's a gateway market," Erik Hanson of JLL, who represented Shanghai Lingang, told the San Francisco Business Times, which first reported the sale on June 28.

He said that while pricing has increased amid the tech boom, San Francisco's office properties are still relatively affordable compared to buildings in larger cities such as Hong Kong or London, making them attractive for international investors.

Shanghai Lingang's website said it was formed in September 2003 and has developed what is now called the Nanhui New City, a waterfront master-planned project on the Hangzhou Bay, southeast of Shanghai.

The building had been on the market for 16 months, and its sale netted its seller a 44 percent profit, said two people familiar with the deal, according to the Business Times. The seller, Market Street Real Estate Partners, bought the building at 755 Sansome Street for $29.5 million in February 2015.

The deal is another sign that buyers, including foreign firms, believe that San Francisco's office market will remain strong despite some turmoil in the technology sector and office buildings getting increasingly expensive, the Business Times said.

"The transaction shows there's continued demand" for San Francisco, Allan Serviansky, principal of Market Street Real Estate Partners, told the publication. "I think it's a safe haven."

aiheping@chinadailyusa.com