Principal Real Estate Investors has sold a San Francisco office tower for $185m (€171m) as it seeks to rebalance its flagship core fund.
According to sources, Principal has sold the 264,859sqft 150 Spear building after nearly 10 years of ownership on behalf of its core US open-ended fund.
The $9.3bn Principal US Property Account bought the asset in December 2007 for $142.5m.
Principal sold it for a 4.8% cap rate to local company Walnut Hill Group.
The fund plans to sell more offices as it looks to reduce its weighting to the sector, from 44% today to between 35% and 40%.
Principal will look to increase its exposure to industrial properties and is looking to invest defensively in retail and apartments.
Earlier this month, IPE Real Estate reported that another core open-ended fund in the US was looking to slow its rate of acquisitions this year.
The sale by Principal coincides with another major San Francisco office deal close to being signed. Brookfield Asset Management is expected to buy One Post Street in the city from McKesson Corporation for between $245m and $250m, according to several sources familliar with the transaction.
Brookfield did not comment.
McKesson is a tenant in the 488,882sqft building and plans to continue to occupy 200,000sqft of space over the next 10 years. The building is currently 84% occupied.
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