Vanbarton retains SF building at 115 Sansome with bid of more than $300 psf 

UPDATED DEC. 14 at 5:15 p.m.:

Another major Downtown San Francisco office building has sold at a considerable discount — but in the case of 115 Sansome, the price was bid up 40 percent by a diverse array of buyers, indicating the city may be past the bottom of the commercial market. 

The winning bid came from the building’s current owner, Vanbarton Group, according to a source close to the ownership group. With the short sale, Vanbarton has canceled out its debt on the building it bought for $83 million in 2016. Instead, the all-cash deal this week closed at around $35 million. The 2016 loan from Bank of America amounted to about $53.6 million, according to public records, and city documents recorded on Dec. 11 confirm that the loan went into reconveyance.

“We now own it free and clear and we’re able to do leasing, and we’re able to do improvements and pay commissions,” said the ownership-connected source, adding that many tenants in the city are searching for stability and want to know that their building won’t be bought by “a vulture fund.”

In the heart of the North Financial District, 115 Sansome Street closed for north of $300 per square foot, or about 40 percent higher than the $25 million pricing guidance when the property was marketed by the brokerage JLL, which declined to comment on the sale.  

The Beaux Arts building, which dates to 1912, has 14 stories plus a penthouse with 118,000 in rentable square footage.

Bidding in the short-sale auction was heated, with more than 20 offers in the first round and more than 10 in the best and final, according to a commercial industry insider. Interest came from not just the local buyers with private money who have dominated the few other commercial purchases this year, but from institutional and international investors, as well as high-net-worth individuals. 

The latter group was especially swayed by the building’s lavish and activated lobby with a Blue Bottle Coffee, omakase restaurant and cocktail lounge on its ground floor, according to the insider, who said some made an emotional connection with the period building.

The sale comes as a positive sign for San Francisco, as trades this year on other Downtown properties have hovered around $200 per square foot. 550 California Street sold for a mere $120 per square foot, a trade which some commercial analysts have said could mark the bottom of the market. 

The buyer on that deal was Peninsula Land and Capital, which made the 13-story tower a few blocks from 115 Sansome its first San Francisco office buy. Its CEO Roger Fields wrote on X, formerly Twitter, that 115 Sansome had received 25 offers and that it was “nice to see this level of activity.”

“There is significant interest in acquiring well priced-San Francisco office buildings,” Fields added. 

The Vanbarton-connected source said that the New York-based company also sees brighter days ahead for the city and that the deal really underscores its “commitment on the asset and belief in the coming recovery of Downtown San Francisco.”

Addition: Story update includes information on the buyer/owner.

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