Is San Francisco Real Estate Showing Signs of Life?

As the expression goes, when it rains, it pours, and that’s certainly true for San Francisco’s real estate market this year.

The boom times brought on by the artificial intelligence industry and a rapid return to office have brought a wave of new leases. Yet, before the first quarter of 2026, this momentum hadn’t translated into major office trades.

Then, local developer and asset manager DivcoWest staked a $450 million claim into 101 California Street, one of a few jewels of the city’s Financial District. Then, the Transamerica Pyramid began a dramatic transition from German hands into Cypriot — fulfilling rumors that had long-swirled in the city for the better part of a year.

This week, another famed downtown commercial property moved. Local developers Presidio Bay, in partnership with the Prado Group, told The Real Deal they are under contract to purchase the San Francisco Centre Mall.

At 1.2 million square feet, the property housed the largest shopping mall in San Francisco, and includes about 300,000 square feet of office. The vacant property embodies the city’s pandemic struggle. Less than a decade ago, the property was valued at $1.2 billion. Last November, following a foreclosure, investors took control of the property for $133 million.

Positioned along the commercial heart of Market Street, questions about the dead mall’s future were top of mind. Can it rise from its own ashes and return as a center of gravity for downtown’s retail economy? Would it be better as offices? Homes? A college campus? Market Street still suffers from an overwhelming number of vacant storefronts, and Union Square, the preferred shopping experience for the well-heeled, is still trying to find its footing.

Little is known about Presidio Bay and the Prado Group’s proposal. Sources close to the transaction told TRD that housing is not expected to be part of the developers’ vision. Beyond confirming the deal, Presidio Bay declined to comment, as did CBRE, which brokered the trade. The developers now enter a 60-day due diligence period before the deal closes.

While we wait for the final numbers on the mall, the value of the Transamerica Pyramid became clearer this week. Green Street News reported that Cyprus-based Yoda PLC will pay “roughly $700 million” for the pyramid, the city’s second tallest office building and priciest lease. It’s unclear, however, whether that number is strictly for the pyramid itself, or if it also includes the two additional structures around the tower that were also part of the deal.

A partnership between Germany’s largest public pension fund, the Munich-based Deutsche Finance Group, and New York developer Michael Shvo paid $650 million for property in 2020. The group took out a $400 million loan for a massive renovation, but only reportedly got through $250 million-worth before the sale. These early numbers paint a conflicting image of the deal: it would mark the priciest office trade in San Francisco since 2021, while also constituting a significant loss for the Germans-Shvo partnership.

A national housing platform?

As the June 2 primary draws closer, the congressional race to replace Rep. Nancy Pelosi is heating up.

State Sen. Scott Wiener, a driving force behind the California legislature’s reinvention as a housing-first political body, is locked in a battle against San Francisco Supervisor Connie Chan, and Saikat Chakrabarti, the former chief of staff for Rep. Alexandria Ocasio-Cortez.
On Monday, Wiener will unveil his housing affordability platform, and his plan to build “millions of affordable homes across the country.” Given his accomplishments in the legislature, Wiener’s entrance into the congressional race threw a spotlight on Congress’s latitude to impact the country’s housing affordability crisis.