One of Silicon Valley’s prominent real estate developers has paid $71 million for a 41,000-square-foot office building in the South of Market neighborhood of San Francisco.
Mountain View-based The Sobrato Organization bought the three-story, creative office building at 180 Townsend St. in an off-market deal, TheRegistry and San Francisco Business Times reported. The seller was DivcoWest, based in The East Cut.
The $1,731-per-square-foot deal is a San Francisco record for investment grade properties, topping the $1,440-per-square-foot price that Los Angeles-based Kilroy Realty Group fetched last year for a 750,000-square-foot building at 1800 Owens St. in Mission Bay, according to the Business Times.
The sale price for 180 Townsend is more than double the $28.25 million, or $681 per square foot, that DivcoWest paid in 2018. The real estate investment firm then invested $20 million to renovate the SoMa building, while the tenant sank another $17 million in property improvements.
The vintage brick building is fully leased to Andreessen Horowitz, a global venture capital firm with offices in San Francisco and Menlo Park. The company’s lease extends through 2031.
It’s located near Oracle Park, the Chase Center and the San Francisco Caltrain station.
Michael Taquino, Kyle Kovac, Giancarglo Sangiocomo and Alec Haley of the Capital Markets team at CBRE represented the seller.
“This transaction between two of the Bay Area’s most established investors signals continued optimism in the San Francisco real estate market,” said Kovac.
The South of Market submarket for office space has a total of 8 million square feet, with a vacancy rate of 31.8 percent through the first quarter, according to TheRegistry.
The Sobrato Organization is owned by the Sobrato family, which since the 1960s has developed 21.4 million square feet of offices, research labs and multifamily projects from San Francisco to San Jose, including Apple’s campus and former headquarters in Cupertino, according to its website.
[TheRegistry, SFBT] – Dana Bartholomew
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