By Jon Peterson
San Francisco-based Zynga is putting its San Francisco headquarters office property on the market for sale, according to sources that track the sale of office buildings in San Francisco. The property has a total square footage of 670,000 square feet with addresses of 650 Townsend and 699 8th Street.Zynga had stated in its 2015 fourth quarter earnings letter that was released on February 10th of this year that this quarter it plans to explore opportunities to monetize its San Francisco building through a sale and long-term leaseback transaction. The company declined to make any other comments on the sale of the property when contacted for this story.
The actual pricing of the potential sale is hard to judge since it will depend of how much space the seller decides to keep in the property, according to industry sources. This is not just going to be a straight sale of the property.
Zynga is counting on earning a significant profit on the sale of the property. In 2012, the company paid $228 million or $340 per square foot to buy the property from San Francisco-based TMG Partners. The sale of office buildings in San Francisco are for the most part now in excess of $800 per square foot. When Zynga bought its building at that time, it had occupied 65 percent of the space in the property.
Zynga as a company is projecting to have a decline in its bookings for the early part of 2016. It stated in its earnings letter that it expects first quarter bookings to be in the range of $150 million to $160 million. This would be similar to last year when the company had a sequential decline driven by the seasonality of its advertising, which primarily impacted Words With Friends and a continued decline in its larger web games.