Sept. 24 (Bloomberg) -- Jamestown, the owner of New York’s Chelsea Market, bought the retail portion of San Francisco’s Ghirardelli Square to expand its holdings of globally known U.S. properties.
The purchase price was $54 million, according to a person with knowledge of the deal who asked not to be identified because the terms of the agreement are private. The shopping complex, sold by Ghirardelli Acquisition Co., has 100,394 square feet (9,327 square meters) of rentable space that are 55 percent leased, the person said.
The retail center’s brick buildings, converted from a chocolate factory constructed at the turn of the 20th century, overlook San Francisco Bay. Its location near Fisherman’s Wharf and distinctive illuminated sign, mounted on the roof 100 feet (30 meters) above ground, help draw tourists to the complex.
“Ghirardelli Square is an American icon,” Michael Phillips, chief operating officer at Atlanta-based Jamestown, said in a telephone interview. The firm is hoping for a restaurant-leasing revival mirroring the square’s 1990s heyday, when it attracted diners including football stars Joe Montana and Jerry Rice, Phillips said. “Food-focus is part of our company culture.”
About $15 million in storefront, signage and plaza upgrades are planned for the property, he said. Phillips declined to comment on the purchase price.
U.S. retail landlords are being helped by rising consumer spending and “nonexistent” construction of malls, according to research company Green Street Advisors Inc. Retail investment is being channeled to “redeveloping higher-quality properties, which should create value,” the Newport Beach, California-based firm said in an Aug. 21 report.
San Francisco’s economy is in the fourth year of job gains fueled by expanding technology and health-care companies, tourism and construction. Leisure and hospitality businesses added 4,700 jobs in the 12 months through August, according to preliminary data from California’s Employment Development Department. The jobless rate of 5.6 percent compares with 7.3 percent nationally and 8.9 percent throughout California.
Since 2011, closely held Jamestown has spent about $900 million on California retail and office properties, becoming the landlord of 799 Market St. in San Francisco, South Shore Center in Alameda and Spenger’s restaurant in Berkeley, Phillips said. The company also owns Santa Monica’s Lantana campus and various properties in downtown San Luis Obispo.
“We’re committed to the West Coast and the Bay Area,” Phillips said.
Ghirardelli Square also has residences, known as Fairmont Heritage Place, that were developed by San Francisco-based JMA Ventures LLC and Fairmont Hotels & Resorts. JMA once owned the retail portion of the square as well.
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