Three Bay Area properties shake alive

A skyscraper, an eye-sore of an abandoned tower foundation, and a waterfront lot of what-could-have-been for Oakland’s professional baseball team shook alive this week, each signaling in their own way momentum for a region still figuring out its post-pandemic identity.

Let’s start with the tallest news.

Despite surging demand and the city’s strongest office leasing year since 2019, San Francisco has not seen many of its actual office buildings trade hands, even as the value of middle-of-the-pack buildings has fallen off a cliff. One private equity executive told me earlier this week that despite the leasing activity brought on by the artificial intelligence industry and return-to-office policies, no one appears ready to put a major bet on office towers. The opportunity, according to the executive, lies in securing a stake in one of the city’s premiere towers, or nabbing a mediocre building off the floor and renovating it into a competitor.

DivcoWest, the San Francisco-based developer and asset manager, appears to have chosen Door 1. According to a source close to the deal, DivcoWest has agreed to purchase a significant stake in 101 California, one of the more recognizable pieces of San Francisco’s skyline. The seller, according to Green Street News, is the Hong Kong Monetary Fund, which has owned part of the tower since 2012, when it teamed up with the Singaporean sovereign wealth fund, GIC Private Limited, to buy a 92 percent stake in the building.

Wrapped in glass and steel, the 600-foot-tall cylinder in the heart of the Financial District contains more than 1.2 million square feet of office space, and hosts tenants such as Chime, Goldman Sachs and Morgan Stanley. Hines, the Texas developer who led on the building’s construction in 1982 and retains a stake, recently put $75 million into a ground-floor renovation that upgraded the outdoor plaza and added a cafe and lounge. That project, drawn up before the pandemic, was completed in 2023.

The deal has not yet closed, but if it does, it will mark the largest tower trade in years. Still, the roughly $900 per square foot (just over $1.1 billion) asking price remains well below the nearly $1.5 billion valuation the structure received in 2015.

The 101 California tower is San Francisco’s 10th-tallest structure. It would have been tied for 11th or if the Oceanwide Center development had ever materialized into its proposed 910- and 600-foot tall mixed-used skyscrapers. Instead the Financial District site has sat as an eyesore for years, as the developer, Oceanwide Holdings, abandoned the project after breaking ground on the property’s foundation.

Yet, the property may soon enjoy new life. On Thursday, the project’s lender — Chinese financial services firm Haitong — seized control of the 1.3-acre site in an auction for $100 million. Now, the firm is expected to turn around and sell the property for the same price to the San Francisco Recovery Fund, a joint venture of SKS Partners’ Dan Kingsley and private equity pro Jay Yang. The fund already put down a non-refundable deposit on the building toward the end of 2025.

Kingsley and Yang have not disclosed their plans for the property, and declined to say whether they still expect new towers on the site.

While plans for the Oceanwide site remain concealed, Oaklanders finally have a sense of what will happen to Howard Terminal. The waterfront property represents a still-open wound for the city, as it was the proposed location for the new Oakland Athletics ballpark before the sports franchise relocated to Las Vegas after political disputes over the stadium’s plans.

According to reports, sports remain in the property’s future. The Port of Oakland, which oversees land use at Howard Terminal, has approved a proposal for a new soccer stadium on the site to host the city’s Roots and Soul franchises. Although the plans were accepted, the sides are still hammering out a formal contract agreement. Los Angeles-based developer, Industrial Realty Group, is also expected to play a role in the site’s redevelopment. According to the San Francisco Business Times, the firm wants to maintain the property as a working dock, and will support traditional, commodity-based maritime operations.