Sobrato to Buy 171K sf Athleta HQ in SF’s Embarcadero

The Sobrato Organization is poised to buy a 171,000-square-foot headquarters for Athleta in San Francisco’s Embarcadero for $80 million.

The Mountain View-based real estate developer and investment firm is close to a deal to buy the five-story office building at 1 Harrison Street, the San Francisco Business Times reported, citing unidentified sources. The seller is Gap, owner of the Athleta women’s activewear brand.

The San Francisco-based clothing retailer bought the building in the shadow of the San Francisco-Oakland Bay Bridge in 1999 for $45 million.

Real estate industry sources told the Business Times that Sobrato will pay around $80 million for the property. The price comes out to around $467 per square foot.

The 105-year-old building now serves as headquarters for Athleta, a women’s activewear brand that makes up one of Gap’s four primary divisions. It isn’t clear how many Athleta employees are based in San Francisco or where they might relocate.

Gap could transfer them to its newly remodeled 545,000-square-foot headquarters at 2 Folsom Street, a block away. Both buildings face the Embarcadero near the waterfront in Downtown San Francisco.

In the past several years, Gap has shrunk its hometown footprint.

The company trimmed its real estate in the city last year by selling a 315,000-square-foot building in Mission Bay that had served as the headquarters for its Old Navy brand. It closed the $356 million sale to DivcoWest in April for the six-story building at 550 Terry A. Francois Boulevard.

The apparel retailer closed three stores in the city during the pandemic, but reopened five last year, including Gap, Banana Republic, Athleta and Old Navy stores at its corporate hub.

Two years after Gap vacated a flagship store in Union Square, it leased a three-story storefront in November for its Banana Republic brand at 152 Gary Street.

Sobrato, a prominent developer in Silicon Valley, has been investing in San Francisco. In May, it bought a 41,000-square-foot office building in South of Market for $71 million.

Office vacancies in the city have reached 27 percent, according to one estimate, prompting a New York Times podcast this week to declare San Francisco “the most empty downtown in America.”