SKS’ De Haro Street Offices Hit the Market

SKS Partners is searching for a buyer for a Showplace Square office building erected less than a decade ago.

San Francisco-based SKS is putting 1 De Haro Street up for sale and has recruited real estate investment bank Eastdil Secured to list the 133,427-square-foot building, the San Francisco Business Times reported, citing sources familiar with the matter.

SKS confirmed the building is for sale and is hitting the market without pricing guidance. The four-story office structure is expected to sell for roughly $800 per square foot, leading to a total price of more than $100 million, sources told the Business Times, though SKS said that pricing estimate was inaccurate.

The developer began construction on the office and light industrial building in 2019. Tech company Samsara pre-leased the entire 86,000-square-foot office portion later that year and today maintains its global headquarters at the site. The property also includes 43,000 square feet of light industrial space; the tenant there is unclear.

SKS secured $93 million in construction-to-permanent financing, consisting of a $56 million senior loan and $37 million in mezzanine funds. The $56 million loan matures in April.

Construction on the building wrapped in 2021.

The potential sale of 1 De Haro would be a rare handover of a stabilized office asset in San Francisco, according to the Business Times. Last month, DivcoWest acquired a major stake in 101 California Street for an undisclosed price; the tower hit the market late last year at $900 per square foot, giving it a roughly $1.1 billion valuation.

In the past three years, most buildings in San Francisco have sold with high vacancy rates or other issues like financial distress. Earlier this week, Presidio Bay Ventures acquired the four-story, 55,000-square-foot office building at 333 Valencia Street in the Mission District through a deed-in-lieu of foreclosure for roughly $27.5 million, or $500 per square foot. Prior to that, CW Capital Asset Management seized ownership of Mid-Market offices at 1155 Market Street via a foreclosure auction for $4 million.

— Chris Malone Méndez