A 16-story San Francisco office tower sold for $6.5 million in 2024, down from $62 million in 2016, after the owners defaulted on a $45 million loan. Downtown buildings are trading at more than 50% below pre-pandemic prices as remote work empties offices across the city.
You know something's wrong when an office building sells for a lot less than many single-family homes in the area, but that's exactly what just happened in San Francisco. A vacant 16-story office tower in San Francisco's Mid-Market neighborhood that sold for $62 million in 2016 just sold for $6.5 million. The owners defaulted on a $45 million loan tied to the property last year, and the property was sold at auction after it was transferred to a special servicer to oversee the building's debt. This is just one of a series of fire sale deals in San Francisco. Much of the downtown and SoMa areas were really hit during the pandemic by the advent of remote work, and there are a ton of buildings that have sold recently recently for more than 50% off their pre-pandemic values. It is an incredible time in San Francisco. There's a ton of opportunity out there, and clearly other investors agree. Let me know if you think SF has hit rock bottom in the comments.
