This is unofficial. SKS Real Estate Partners is buying the office building at 350 California Street for as much as $67.5 million in a fire sale that could reset office prices across San Francisco.
The San Francisco-based company teamed up with a South Korean investor to pay $200 to $225 per square foot for the 297,600-square-foot building in the Financial District, According to the San Francisco Business Times, Citing unknown sources.
The seller of the 22-storey glass and stone tower is Tokyo-based Mitsubishi UFJ Financial Group.
The deal was valued at $60 million to $67.5 million, about 75% below expectations The building seeks $250 million when it hits the market in 2020.
Before the pandemic, California Street was home to some of the most valuable commercial real estate in the world.Today, in the era of telecommuting, the vacancy rate of office buildings in the city has jumped to A record 32.7%compared to 4% before infection.
Some of the city’s most notable corporate tenants, from sales force arrive meta platformThere are sublease offices, flooding the market with square footage.
The plunge in office workers has hit the financial district, causing restaurants, stores and other small businesses to lay off workers or close their doors.
The sale of 350 California could set a new office benchmark.
The tower, built in 1976, is now 75 percent vacant because anchor tenant Union Bank has moved most of it out.
Union Bank, previously owned by Mitsubishi UFJ, used to occupy the entire building. MUFG sold Union Bank to US Bancorp in December.
CBRE brokers Kyle Kovac and Mike Taquino represented the seller in the construction sale.
Commercial real estate experts say this could be the bottom of the city’s office market. SKS has a history of buying distressed properties and then investing in them.
“For other market players who have been waiting on the sidelines, this could be a boost of confidence. This market will offer more opportunities than anyone in more than 40 years,” Derek Daniels, research director at Colliers International in San Francisco, told The Business Times.
“If it’s SKS, it’s a much more positive sign for San Francisco, considering the established local owners are choosing to reinvest in San Francisco.”
— Dana Bartholomew
