The price of the Wells Fargo tower ($120 to $130 per square foot) and the price of the Union Bank tower ($200 to $225 per square foot) now serve as benchmark for other older office towers. But it had undergone $41 million in seismic upgrades and renovations recently. The first tower to find a buyer in the new era of working-from-home and office-footprint reduction had been the Union Bank headquarters tower at 350 California, which changed hands in early May at 75% off the original listing price in 2020, at around $200 to $225 per square foot. That would be 71% below the original asking price and nearly 60% below the purchase price in 2005. Earlier this year, it engaged real estate investment bank Eastdil Secured to relist the tower.Īnd it has now made a deal – the name of the buyer has not been disclosed – for about $42.6 million to $46 million ($120 to $130 per square foot), according to sources cited by the San Francisco Business Times.
Last year, it listed it for $160 million, but then pulled the listing after receiving bids reportedly below $40 million. Wells Fargo had purchased the tower in 2005 for $108 million. Wells Fargo found a buyer for one of its office towers in San Francisco, the 13-story 355,000-square-foot 1960s-era tower at 550 California, across the street and around the corner from its headquarters tower on Montgomery. So now there’s the second deal in about a month - though the sale hasn’t closed yet. About 33% of all office space is now on the market for lease – worse even than Houston, which was for years the worst office market in the US.
There were no transactions because no one knew what anything was worth as San Francisco’s office market has morphed in just a few years from being one of the hottest office markets in the US with a vacancy rate of 7% in 2019 and some of the highest rents in the US, to being put on ice by working-from-home. The burning question arose over the past two years what these largely empty older office towers in San Francisco are worth.
And nearly 60% off the purchase price in 2005.
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