San Francisco Office Market Witnesses First Nine-Digit Office Trade Sale Since COVID Pandemic

San Francisco’s office market has hit a major milestone with its first nine-digit sale since the onset of the pandemic. DivcoWest and Blackstone Real Estate acquired the 25-story office tower at 199 Fremont Street for $111 million, marking the city’s largest post-pandemic office transaction. The 420,000-square-foot building, located in the SoMa district, previously saw valuations around $905 per square foot in 2020 but sold for about $265 per square foot in this latest deal.

DivcoWest, which already held a 49 percent stake alongside CalSTRS, and other investors like the AFL-CIO Building Investment Trust and Germany’s Manova Partners, finalized the sale with plans for a significant makeover. The property will be rebranded as 300 Howard Street and renovated with amenities like a wellness center and conference facilities, aiming to transform it into a "high-performance hub" suited for modern companies.

This deal highlights a broader trend of investors purchasing San Francisco office properties at steep discounts and reinvesting in major improvements to attract tenants. Other players in this trend include New York Life, Barings, Brookfield, and Flynn Properties. Flynn Properties, notably, is in the process of buying the $416 million debt on the downtown Market Center towers for around $171 million, which could mark the city's largest sale since 2020.

Adding to the positive momentum, JPMorgan Chase announced plans to expand its footprint at 560 Mission Street by 65,000 square feet, bringing its total to nearly 280,000 square feet. The building will be renamed the JPMorganChase Center, serving as the bank’s Bay Area headquarters for over 1,600 employees. This expansion follows JPMorgan’s acquisition of First Republic’s former space at One Front Street, where it retains about 102,000 square feet.

However, uncertainties remain. Business leaders are voicing concerns over potential impacts from President Donald Trump’s new tariff proposals, which could disrupt stock markets and venture capital flows. Swig CEO Connor Kidd warned that ongoing economic uncertainty might dampen office demand in future quarters, noting, "Businesses really hate uncertainty."

On the retail front, Goodwill San Francisco Bay will close its headquarters and 11 stores across the region following a merger with Arizona’s Goodwill of Central and Northern Arizona. The nonprofit plans to replace shuttered locations with larger stores, including a new 27,000-square-foot site opening this summer at an undisclosed Bay Area location.

Sources:

• Landes, Emily. “SF Office Market Sees First Nine-Digit Trade Post-Pandemic.” The Real Deal, April 27, 2025.