San Francisco Office Tower Gets Makeover After Failed Auction

A month ago, no one wanted 600 California, the Class A office tower once owned by WeWork in the heart of San Francisco’s Financial District. Now, the property has a new capital partner and major renovations planned to help it compete in the artificial intelligence leasing boom.

Lone Star Funds bought the debt backed by the 20-story, 360,000 square-foot tower in December for about $130 million, a sharp discount from the more than $320 million WeWork paid for the building in 2019. In April, no one made an offer at the foreclosure auction, and Lone Star Funds became the owner.

This week, the firm announced a partnership with San Francisco-based Harvest Properties, which purchased an equity stake in the building and announced plans for a major renovation that will include a spec buildout of a full-floor amenity space. Harvest has declined to discuss the details of its ownership stake and the cost of the buildout. The building was 25 percent occupied, the company’s director, Chris Trotier, told the San Francisco Business Times.

The AI leasing boom has forced landlords of San Francisco’s most traditionally sought-after spaces to retool to attract this new generation of tenants, many of whom are younger and want pre-furnished offices with plenty of amenity space. Christine Yeun, vice president of leasing with high-end landlord BXP, told The Real Deal earlier this month that competition has gotten so fierce that she’s even considering spec suite buildouts at Salesforce Tower, the city’s pre-eminent trophy office space.

BXP’s competitors are spending up to $40 million on full-floor renovations — not for existing tenants, but to lure prospective ones, Yeun said. .

Soaring prices presents a third option

The AI frenzy — and hiring the sprees that come with it — has also tightened the apartment market in San Francisco, where the median price of a one-bedroom apartment crossed $4,000 per month for the first time ever.

While rents have largely stayed flat nationally, they have soared in San Francisco. Year-over-year, the national median rent for a one-bedroom apartment decreased by 0.1 percent, and two-bedroom rents decreased by 0.2 percent, according to Zumper’s national rent report. San Francisco’s rent one-bedroom rent jumped 21 percent over that time.

This, combined with a median single-family home price that eclipsed $2.1 million, has diminished the possibility for many San Francisco renters to eventually become San Francisco homeowners. However, the state legislature took a major step this week in making it easier for developers to offer a third option — condos.

The California Assembly unanimously passed AB 1903, 70-0. The bill — authored by Berkeley Assemblymember Buffy Wicks, one of the legislature’s leading YIMBYs (yes, in my backyard) — targets the state’s condo defect liability law, which leaves developers and general contractors vulnerable to expensive lawsuits for any mistakes made in the construction of a condo for up to 10 years from the sale of a newly built unit. Lawsuits have included problems from bubbling paint to structural issues in the foundation.

The threat of a lawsuit has thwarted condo development throughout the state since the 10-year statute of limitations was passed in 2002. Condo construction has fallen by 90 percent since 2005, according to 2025 analysis by the Terner Center for Housing Innovation out of UC Berkeley.

Wicks’ bill would provide developers and general contractors a right-to-repair before a homeowner — or, most often, a homeowners’ association — can sue for any defects. The bill now heads to the Senate for a vote, and then a possible signature from Gov. Gavin Newsom.