Less than a year after coming to market with a $160 million asking price, the office tower at 550 California Street owned by Wells Fargo is likely to sell for about one-quarter of that price, according to a source close to the deal.
The bank is currently evaluating several offers in the low $100 per square foot range, or around $40 million for the 355,000-square-foot, 13-story Financial District tower it bought for $108 million in 2005.
Unlike last year, when Wells pulled the 1960 building from the market after it did not get satisfactory offers, the building is expected to trade this time around, according to the source.
JLL listed the property last year, but it was relisted this spring with Eastdil Secured at
an asking price of around $150 per square foot, according to the San Francisco Business Times. Eastdil Secured was Wells Fargo’s private real estate investment banking division until it was sold at the end of 2019.
Eastdil Secured and Wells Fargo declined to comment.
Office deal volume in the city has dropped considerably of late, due to a combination of rising interest rates, high office vacancy rates and volatility in the banking sector. During the four-quarter period ending in the first quarter of 2023, sales were down by more than 70 percent year-over-year, for a total of $513 million, according to Transwestern’s first-quarter office report.
There were only four commercial deals in the city over $10 million in the first quarter, according to the report, with Sobrato’s purchase of Gap’s Athleta headquarters for $82.5 million by far the biggest. At 171,000 square feet, that property traded for about $467 per square foot, which is about what Wells had hoped to get for 550 California when it first listed last year.
Wells Fargo has consolidated its office space over the last year by listing 550 California, ending its long-term tenancy at 45 Fremont Street and signing a 10-year renewal on a 620,000-square-foot lease at 333 Market Street. That building, owned by Columbia Property Trust and Allianz Real Estate of America, has been on the market at an undisclosed price since last fall.
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