The San Francisco Office Market is Still in Transition

There has been so much positive news about new lease signings, some of them very signficant, and mostly fueled by the AI explosion which fortunately has been centered in San Francisco. Billions of dollars in new fundings and millions of feet of office space leased during the past year by this one industry category. However, the Class A office investment market is still in transition, and is a long way from getting out of the woods. As a very recent case in point, 600 California Street is a 20-story Class A office buuilding which was purchased by WeWork Capital Advisors in 2019 for $331 million, or $920/rsf. It is now rumored to be purchased by Lone Star Funds out of Dallas for $122 million, or $340/rsf, which would be a63% price decrease. The postive spin is…it could have been a lot worse!