San Francisco Office Building Could Fetch Nearly $70 Million

Kairos Investment Management is testing the San Francisco office market as it continues to heat up with demand from tech and artificial intelligence tenants.

The Irvine-based investor has listed the 10-story office building at 550 Kearny Street for sale, aiming for a price in the low- to mid-$300-per-square-foot range, the San Francisco Business Times reported. If sold near that price point, the deal would value the 193,000-square-foot property somewhere in the high-$50 million to high-$60 million range, representing a sharp jump in value from the firm’s roughly $35 million value two years ago.

Kairos acquired the distressed loan tied to the building in May 2024 for $35.4 million before taking control weeks later at about $180 per square foot. The listing makes 550 Kearny the first major reset San Francisco office property to return to market after changing hands at post-pandemic pricing lows. It remains to be seen whether Kairos emerges with that valuation.

The building is described by CBRE, which is marketing the property, as a “value-add office opportunity” with occupancy sitting at 28.6 percent. Kairos partnered with Gensler on a repositioning plan that includes a new roof deck, revamped lobby and upgraded fitness space, though it’s unclear how much of that vision has actually been executed. The property also includes a 150-stall underground parking garage.

The 550 Kearny building is the latest to hit the market seeking to reverse its fortunes from just a few years ago. Last month, UBS Realty Investors relisted 455 Market Street in the Financial District, four years after its initial sale attempt. The firm first sought roughly $750 per square foot for the 23-story property in 2022, or about $280 million. UBS is reportedly now looking to offload the 374,200-square-foot building in the upper-$300-per-square-foot range — more in line with 550 Kearny’s pricing guidance — which would place its value between $130 and $139 million.

— Chris Malone Méndez