We’re not ready to name it a “doom cycle” but, however that’s the time period some analysts are starting to connect to downtown San Francisco, the place a hearth sale of workplace towers has begun to speed up within the hollowed-out metropolis heart.
Two extra downtown workplace properties have been listed this month with pricing that displays collapsing workplace valuations in San Francisco.
CBRE Funding Administration is procuring a 138K SF workplace constructing at 123 Townsend Road which is 73% leased to PayPal. The property, which is being marketed by Newmark, is predicted to get presents round $90 million, nicely beneath the $140M CBRE Funding paid for it in July 2020, in accordance with a Inexperienced Road report.
NYC-based Clarion Companions is advertising and marketing a 157K SF constructing at 60 Spear Road that’s 37% occupied and is valued at $55 million, about half the $107M Clarion paid for the constructing in 2014, when it was 80% occupied. JLL is advertising and marketing the constructing for Clarion.
When it was first listed in 2020, the asking worth for 350 California Road in Downtown San Francisco was $250M. In an indication of the occasions within the beleaguered metropolis, the workplace tower was bought this month for about $60M.
MUFG Americas has bought the 286K SF tower at 350 California Road to San Francisco-based developer SKS in a deal estimated at $200 to $225 per SF. A Korean actual property investor is partnering on the deal, in accordance with a report within the San Francisco Enterprise Instances.
The 22-story Monetary District constructing is sort of empty. Union Financial institution, the anchor tenant at 350 California Road, has vacated the constructing. In 2021, bidding on the constructing by no means exceeded $180M and the homeowners took it off the market.
Bids for the 355K SF constructing at 550 California Road got here in round $39M, Inexperienced Road reported. The unique whisper worth was $160M when Wells Fargo, which is vacating the 13-story property, first put it up on the market final summer season. After Wells Fargo assigned Eastdil Secured to relaunch the itemizing in January, the whisper worth was slashed to $53 million.
For 123 Townsend Road, often known as the Townsend Constructing, CBRE Funding is also providing vendor financing. Newmark’s advertising and marketing supplies word that a purchase order at such a low foundation might enable a purchaser to supply aggressive rents to fill vacant area. It additionally touts the steady money movement offered by PayPal, which nonetheless has six years left on its lease and has invested greater than $11Mn into its area since 2018.
JLL is pitching 60 Spear Road as a value-added play, highlighting the constructing’s location within the Monetary District, a block from the Embarcadero BART Station and San Francisco Ferry Terminal. The property was renovated in 2013.
Practically a 3rd of the workplaces in San Francisco are empty, a emptiness fee that approached 30% within the first quarter of 2023.
