San Francisco Art Academy to Sell $130 Million Portfolio

The Academy of Art University wants to sell a significant portion of its San Francisco real estate holdings, signaling a major shift for one of the city’s most prominent property owners.

The private, for-profit institution, long known for its bold signage and expansive downtown footprint, has listed 10 buildings totaling nearly 375,000 square feet for about $130 million, the San Francisco Chronicle reported. The sell-off follows the school’s earlier liquidations of a student dorm at 825 Sutter Street and a Bayview warehouse.

The properties span key neighborhoods including Van Ness Corridor, North Beach, Nob Hill, Civic Center, and Union Square. They include historic landmarks like St. Brigid Church, a 138,000-square-foot office building at 150 Hayes Street, residential holdings, a large industrial building on Van Ness Avenue and a retail building in North Beach.

Marcus & Millichap is marketing the portfolio, the Chronicle reported.

The university, founded in 1929 by the Stephens family, has been led by President Elisa Stephens since the early 1990s. Under her leadership, the academy grew rapidly, doubling its property holdings between 1994 and 1998. However, the rise of remote learning and declining on-campus demand have prompted a strategic consolidation.

The university cited changing student needs and the growth of hybrid education as reasons behind the sell-off. Despite the downsizing, the academy plans to maintain a presence in San Francisco.

The school’s real estate deals have stirred controversy. It faced a $60 million settlement in 2016 over zoning violations and unpermitted building conversions, and critics have long accused it of operating in a legal gray zone as both a school and a private business.

The Academy settled a fraud lawsuit in 2021 and is currently under review by the WASC Senior College and University Commission for issues related to student success metrics and graduation rates. A follow-up accreditation visit is scheduled for this fall. The university remains confident in its compliance and future accreditation status.

— Joel Russell

CHAPGPT VERSION:

The Academy of Art University is preparing to sell a significant portion of its San Francisco real estate holdings, signaling a major shift for one of the city’s most prominent property owners. The private, for-profit institution, long known for its bold signage and expansive downtown footprint, is listing 10 buildings totaling nearly 375,000 square feet for approximately $130 million. These properties span key neighborhoods including Van Ness Corridor, North Beach, Nob Hill, Civic Center, and Union Square, and include historic landmarks like St. Brigid Church and a 138,000-square-foot office at 150 Hayes Street.

This move follows earlier sales of a student dorm at 825 Sutter Street and a Bayview warehouse, reflecting a broader downsizing trend. The university, founded in 1929 by the Stephens family, has been led by President Elisa Stephens since the early 1990s. Under her leadership, the Academy grew rapidly, doubling its property holdings between 1994 and 1998. However, the rise of remote learning and declining on-campus demand have prompted a strategic consolidation.

The university cited changing student needs and the growth of hybrid education as key drivers behind the sale. It also recently announced the end of its intercollegiate sports program. Despite the downsizing, the Academy plans to maintain a strong presence in San Francisco.

The school’s expansion has not been without controversy. It faced a $60 million settlement in 2016 over zoning violations and unpermitted building conversions, and critics have long accused it of operating in a legal gray area. Additionally, the Academy settled a fraud lawsuit in 2021 and is currently under review by the WASC Senior College and University Commission for issues related to student success metrics and graduation rates. A follow-up accreditation visit is scheduled for this fall. The university remains confident in its compliance and future accreditation status.