Paramount Group is buying a San Francisco office asset from the Florida State Board of Administration (Florida SBA) for $521m (€463.9m).

The sale of the One Front Street building, 99.4% let, is expected to close by year-end.

Florida SBA held the property in a separate account with Invesco Real Estate.

The US pension fund said it did not comment on deals until 30 days after closing.

Florida SBA has owned One Front Street since 1996, when it paid $103m.

Equitable Real Estate Investment Management managed the asset at the time.

The potential sale price of the property comes in at around $800 per sq ft, putting the 651,000 sq ft property slightly higher than the average of $750 per sq ft that most San Francisco office buildings are trading at, according to sources that track the sale of office buildings.

Albert Behler, chairman and chief executive at Paramount, said: “We expect our proven, pro-active management approach will meaningfully increase the net operating income from the property in the near to medium term as the existing leases, which are around 20% below market, expire.

“We are evaluating certain redevelopment opportunities, which could unlock additional value in the next 3-5 years.”

Paramount could bring in a joint venture partner for the property or sell an asset within its portfolio in a tax-efficient manner.

The company’s other assets in the San Francisco market are 50 Beale and One Market Plaza, according to the company’s website.

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