Core Plus

We are inspired by innovation industries and economies, and we invest in the life and work of the people who make the future possible.

Multifamily / Renovation
Multifamily / Renovation
SF Portfolio
Transaction Highlights
Size: 23 properties (2 separate portfolios)
Use: Multifamily (w/ retail)
Neighborhood: San Francisco

Strategy
  • Two multifamily portfolios comprising 913 total units, the portfolios spanned 23 properties across 10 neighborhoods, representing an unprecedented opportunity to invest in a diverse cross-section of San Francisco multifamily properties
  • Prado and its partners were able to purchase two apartment portfolios off-market directly from special servicers in two separate transactions
Execution
  • Employed value-add strategies, including unit renovations and unit conversions, which increased cash flow and made the apartments more competitive with newer construction
  • Activated the ground floor retail spaces in many of the properties, creating additional amenities for residents
Results
  • Prado successfully recapitalized both portfolios with a university endowment in 2016
  • Prado ultimately sold portfolios in 2018
Multifamily / Renovation
Multifamily / Renovation
1221 Jones
Transaction Highlights
Size: 68,120 sq. ft.
Use: Multifamily
Neighborhood: Nob Hill, SF
Strategy
  • Secured one of the high-quality San Francisco assets off-market through a combination of a direct relationship with the seller and prior experience with the seller’s broker.
  • The 72-unit rent-control property boasts coveted views of the Bay Bridge, Golden Gate Bridge, Grace Cathedral, Mount Diablo, and Huntington Park and as well as subterranean parking.
  • The property is an irreplaceable institutional quality asset given a 14-story high-rise view property is not possible to build today at the top of Nob Hill.
  • The property was acquired through a joint venture between Prado Group and Felson Companies.
Student Housing
Student Housing
2500 Durant/2520 College
Transaction Highlights
2500 Durant: 40 residential units; 3 retail units; 32,121 sq. ft.
2520 College: 49 residential units; 36,817 sq. ft.
Use: Residential/Retail
Neighborhood: Berkeley, CA
Strategy
  • Prado felt that both assets had been mismanaged by “mom & pop” ownership
  • Immediate opportunity to increase apartment rents due to high turnover from student tenants
  • Prado believed that the retail rents were below market on the 2500 Durant asset and there was an opportunity to improve the retail income and upgrade credit
  • Prado felt they could improve the renter experience at both buildings by exterior/interior painting, repointing brick, new carpeting, and signage improvements
  • On individual units, Prado saw an opportunity to convert one-bedrooms to two-bedrooms by simply adding a wall which resulted in an immediate pop in rents
Results
  • Prado was able to secure Super Duper as the anchor tenant at 2500 Durant at a rent that was 45% above pro-forma underwriting
  • While Prado and Jonathan Rose would have liked to hold the assets in perpetuity, we evaluated marketplace in 2019 and decided that it was the appropriate time to sell for several reasons:
    – There were major legislative headwinds that could have had a profound impact on the ability to raise rents for rent-controlled units in Berkeley
    – Capitalization rates had compressed from our pro-forma of a 5.5% exit cap to 4.0%
    – There were concerns regarding the sustainability of the high retail rents on Telegraph due to deteriorating street conditions and the addition of retail at the Berkeley Student Union

    • Ultimately, a broker was hired, and the properties were widely marketed and sold to Goldman Sachs after a competitive bidding process

  • The NOI on 2500 Durant improved by 124.4% from acquisition and was 34.6% percent above pro-forma at disposition
  • The NOI on 2520 College improved by 76.0% from acquisition and was 32.1% percent above pro-forma at disposition
  • Prado refinanced the properties in 2015 and was able to return 69.9% of the original capital invested

Value Add

We aspire to develop the spaces and places that make life more livable, work more productive, and play more possible.

Multifamily / Repositioning
Multifamily / Repositioning
2130 Post
Size: 97,000 sq. ft.
Use: Residential
Neighborhood: Lower Pacific Heights, SF

Strategy
  • Formerly used as student housing for the UOP School of Dentistry
  • Prado was able to win a competitive bid process by working with land use counsel to determine that the building was not subject to rent control
Execution
  • The concrete building was completely renovated and converted into luxury apartments including the addition of four newly-developed units on the ground floor with private outdoor terraces
  • Additional amenities added included a redesigned all-glass entry, new lobby, mailroom, community room, fitness center, bike storage and repair, remote work center with WiFi, and outdoor garden
Results
  • Prado crystalized its promote interest upon stabilization in 2014
  • Property was partially sold and partially traded to a University in exchange for residual fee interest in a ground lease property
Awards
  • 2014 PCBC Gold Nugget Merit Award for Renovated Project
Grocer + Drug Anchor / Repositioning
Grocer/Drug Anchor / Repositioning
1401 California
Transaction Highlights
Size: 30,000 sq. ft.
Use: Retail
Neighborhood: Nob Hill, SF
Strategy
  • Prado identified an underutilized site with a grocery store that was planning to vacate
  • Through an attorney relationship, Prado was able to purchase the site off-market
Execution
  • Acquired two separate interests from feuding family members
  • While the site allowed for a large mixed-use development, Prado felt that the re-lease of the building created the highest risk-adjusted return
  • Prado adaptively reused the building, which was renovated, subdivided, and re-tenanted with Trader Joe’s and CVS
  • Obtained Formula Retail Conditional Use approval within three months of initial filing
  • Updates included adding an elevator and stairs to improve vertical circulation from the lower parking area to the store and renovating the facade
Results
  • Prado achieved the highest grocery and drug store rents in the market for both Trader Joe’s and CVS
  • Prado was also able to reduce tenant control to allow for optionality of future development (max of 25 years)
  • Trader Joe’s was operational within 12 months of Cala Foods’ departure
  • Prado successfully refinanced the property in 2012 and returned all invested equity
Multifamily / Unit Conversion
Multifamily / Unit Conversion
Multifamily Portfolios
Transaction Highlights
Size: 23 properties (2 separate portfolios)
Use: Multifamily (w/ retail)
Neighborhood: San Francisco

Before

After

Strategy
  • Two multifamily portfolios comprising 913 total units, the portfolios spanned 23 properties across 10 neighborhoods, representing an unprecedented opportunity to invest in a diverse cross-section of San Francisco multifamily properties
  • Prado and its partners were able to purchase two apartment portfolios off-market directly from special servicers in two separate transactions
Execution
  • Employed value-add strategies, including unit renovations and unit conversions, which increased cash flow and made the apartments more competitive with newer construction
  • Activated the ground floor retail spaces in many of the properties, creating additional amenities for residents
Results
  • Prado successfully recapitalized both portfolios with a university endowment in 2016
  • Prado ultimately sold portfolios in 2018
Office / Repositioning
Office / Repositioning
333 Valencia
Transaction Highlights
Size: 55,685 sq. ft.
Use: Office/Retail
Neighborhood: Mission District, SF
Acquisition: 2014
Capital Event: 2018
Strategy
  • Acquired in 2014, Prado Group’s vision was to completely redevelop the former light industrial building to a trophy boutique office asset located in San Francisco’s amenity-rich Mission District.
Execution
  • Our ownership group has invested  in core and shell capex and tenant improvements to enhance the Property with a full seismic upgrade, a new PG&E electrical service, new mechanical, electrical, plumbing and sprinkler/life safety systems, new roof, 2 new elevators and exit stairs, new core and shell restrooms, new entry lobby and elevator lobbies, new bike room and site improvements.
  • We have constructed Class A tenant improvements on behalf of the City and County of San Francisco’s Department of Public Health on floors 2-4. The City and County of San Francisco’s tenant improvements will be certified Gold under the LEED for Commercial Interiors standard.
Results
  • Prado Group redeveloped an underutilized building into a class-A gem and refinanced the asset in 2018. As of now, 333 Valencia is one of very few boutique assets with long-term, investment grade tenancy in San Francisco.

Opportunity

We’re strategic and hands on, identifying each asset's opportunities, mitigating the risks, and focusing on value creation at each stage in the asset and property management process.

Multifamily / Mixed-Use
Multifamily / Mixed-Use
3333 California
Transaction Highlights
Size: 744 residential units; 35,000 sq. ft. retail
Use: Residential/Retail
Neighborhood: Laurel Heights, Presidio Heights, Pacific Heights, SF

Strategy
  • Site is currently improved with a 360,000 sq. ft. office building and 550 parking spaces
  • Structured the transaction to include a fully-prepaid 99-year ground lease with a space leaseback to UCSF with unilateral termination right
  • Entitle, recap, develop, sell condos, maintain apartments and retail
Execution
  • Secured the site in a competitive RFP process with more than 20 national and international development firms
  • Restructured transaction to convert speculative development and entitlement into a credit tenant leased investment with 10-year lease back and unilateral termination right under a 5.5% return on cost for covered land
  • Obtained approval from the California Governor for AB900 project streamlining as an environmental leadership project
  • Secured over 1,000,000 sq. ft. in entitlement from a 363,000 existing building
  • Obtained up to 92 foot heights in rezoning in 40 foot height zone
  • Entitled site with unanimous approval from the Planning Commission and Full Board of Supervisors for 15 buildings containing 744 units, including 558 market-rate condos and apartment homes
  • Prado Group is currently in the process of recapitalizing the project for vertical development
See the 3333 California project page
Multifamily / Mixed-Use /
For Sale
Multifamily / Mixed-Use / For Sale
2238 Market
Transaction Highlights
Size: 44 residential units; 5,000 sq. ft. retail
Use: Residential/Retail
Neighborhood: Duboce, Triangle, SF
Strategy
  • Prado identified an underutilized funeral home and parking lot across from a Muni stop in the most desirable neighborhood of Duboce Triangle and Upper Market
Execution
  • Adaptive reuse of an existing historic building
  • Prado received planning approvals in 2016
  • Successful recapitalization in 2016 with a foreign partner
  • Construction of 5,000 sq. ft. of ground-floor retail, 42 residential condo units above the retail; 2 town-homes
  • Added a 24-space below-grade parking structure
  • LEED Platinum
Results
  • 85% sold
See the 2238 Market project page
Multifamily / Mixed-Use
Multifamily / Mixed-Use
1266 9th
Transaction Highlights
Size: 15 residential units; 5,650 sq. ft. retail
Use: Residential/Retail
Neighborhood: Inner Sunset, SF
Strategy
  • Prado identified an underutilized parking lot and adjacent building in the Inner Sunset neighborhood
  • Prado was able to purchase the site in an off-market transaction
Execution
  • Prado obtained planning approvals and built a groundfloor, neighborhood-serving cafe, La Boulangerie (later acquired by Starbucks)
  • 12 rental condo flats above the retail and 3 rental townhomes
Results
  • The property was refinanced after completion
  • Ownership elected to hold the condo units as rentals to align with long-term strategic objectives
Awards
  • 2014 PCBC Grand Award for Best Mixed-Use Project
See the 1266 9th project page
Multifamily / Mixed-Use
Multifamily / Mixed-Use
38 Dolores
Transaction Highlights
Size: 81 units; 76,019 sq. ft. residential; 31,432 sq. ft. retail
Use: Residential/Retail
Neighborhood: Mission Dolores, SF
Strategy
  • Site of the former underutilized S&C Ford auto dealership
  • Prado sourced the opportunity off-market through a complex C-Corp M&A transaction to get to the underlying real estate
Execution
  • The project obtained unanimous approval at the Planning Commission and received endorsements from the SF Bicycle Coalition, SF LGBT, SFHAC, SPUR, SF Architectural Heritage, Merchants of Upper Market Castro (MUMC)
  • Flagship 30,000 sq. ft. Whole Foods Market on the ground floor with 81 luxury residential units above
Results
  • Refinanced and recapitalized for a long-term hold with a pension fund
  • Prado achieved the highest grocery store rents in the market
  • Whole Foods is percentage rent within 2 years
Awards
  • 2014 PCBC Gold Nugget Grand Award for Residential Project of the Year
  • 2014 PCBC Gold Nugget Grand Award for Best Multifamily Housing Project 60+ du/acre
  • 2014 MHN Best New Development: Mid-Rise of the Year
See the 38 Dolores project page