Columbia Property Trust and Allianz Real Estate are selling a 33-story office tower at 333 Market Street in San Francisco’s Financial District that is leased in its entirety by Wells Fargo.
In June, the bank renewed a 10-year lease for the 622K SF tower. The asking price for sale of the Market Street tower has not been disclosed, according to a report in the San Francisco Business Times.
Columbia paid $395M for the tower in 2012 and now owns a majority stake in the property.
With San Francisco’s office vacancy rate still over 21% and several high profile tech companies downsizing or vacating office footprints to embrace hybrid work, the owners appear to be betting that having a single anchor tenant locked in will enhance the value proposition for 333 Market Street.
Ironically, the tenant who is central to this strategy—Wells Fargo—earlier this year announced its own footprint downsizing and unsuccessfully tried to sell its own office tower in San Francisco.
After announcing earlier this year that it would reduce its overall US real estate footprint by 7%, Wells Fargo listed a 13-story, 355K SF building it owns at 550 California Street.
The listing for the California Street building was withdrawn when bids for the property came in well below the $160M asking price, according to a report in the San Francisco Chronicle.
Another tower in proximity to 333 Market also was listed and then withdrawn recently for the same reason: UBS wanted $280M for its 374K SF office tower at 455 Market Street.
Wells Fargo’s decision to remain at 333 Market Street, a space it has occupied since 2018, was the largest lease signing in San Francisco since the pandemic started.
In April, after announcing plans to reduce its real estate footprint, Wells Fargo vacated 147K SF it occupied in a 34-story office tower at 45 Fremont St. in the Financial District.
In perhaps the best news the San Francisco office sector has heard all year, the city’s office occupancy rate topped 40% for the first time this year in Kastle’s 10-city average, based on a survey of entry card swipes. The back-to-work barometer reported a 40.7% occupancy level in SF.
Several major tech players have downsized their office footprints in San Francisco this year as they embraced hybrid work, including one of the city’s largest employers, Salesforce.
In July, Salesforce listed for sublease 412K SF of the 817K SF Salesforce West tower on Fremont St., one of two HQ towers in San Francisco with the company’s name on it.