A San Francisco office tower that once served as the headquarters for Burning Man and leasable office space for WeWork has been sold at an eye-popping discount.
The new owner of the 15-floor David Hewes Building in the city's Mid-Market neighborhood got it at 90% off the price it was last sold for in 2016.
When it was first built in 1908, the building made headlines as one of the finest towers in the city. It sits just across the street from the Golden Gate Theater, but it's also on the edge of the Tenderloin and smack dab in the middle of the Market and Sixth corridor – an area the city has been battling to make safer.
The deeply discounted price of the tower could eventually be an opportunity for the new owner, but it also displays the dramatic difference in pricing in San Francisco real estate overall.
For the same price of the tower with about 4,000 feet of office space per floor, someone can buy a three-story, 4,300-square-foot home on Union Street near Russian Hill or for a couple million more and just three blocks away on Market Street, a two-story penthouse in the luxurious Four Seasons building.
For commercial real estate experts, the bargain price of the David Hewes Building and others in downtown may also represent a sign of a turnaround for the city.
"I think we've reached the bottom as it relates to pricing of office space in San Francisco and there's growing conviction of a recovery story," Alexander Quinn said.
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Quinn directs research on commercial property at Jones Lang LaSalle in San Francisco. He said interest and leasing of commercial properties in the city have been on the upswing over the last year. That includes companies looking to relocate from other parts of the U.S. and from other countries.
What's not yet clear is how long a rebound will take.
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