By Jon Peterson
Craigslist has put back on the market for sale the office/retail building in San Francisco located at 222 Sutter Street. The pricing guidance on the planned sale is $60 million, or roughly $443 per square foot, according to sources that are familiar with the property.
This action represents the second time that the property has been offered up for sale in the past three years. In the fall of 2019, the owner put the property up for sale seeking as much as $100 million, according to industry sources. The sale did not materialize, and it was taken off the market. The change in price point reflects the conditions in the San Francisco office market since the start of the COVID-19 pandemic from both an investor interest to buy office buildings and the demand from tenants to lease space. The conditions at 222 Sutter exemplify this transition; the property was 68 percent leased in 2019 and now that number is around 22 percent occupied.
The seller has chosen the San Francisco office of CBRE to be the listing agent on the sale. Those working on the marketing of the property include Mike Taquino and Kyle Kovac, both executive vice presidents with the firm. CBRE declined to comment when contacted for this story.
Craigslist has been the owner of the property since March 2012. It paid $53.8 million to acquire the property at that time, according to public records.
If the price point is reached on this sale, it would come in at $443 per square foot. This would make it a significant discount to the pre-COVID-19 sales price and replacement cost. The property totals 135,196 square feet, and it could be leased to a single-tenant for a high-identity headquarters location. The property does have average size floor plates of 15,000 square feet.
The asset could get interest from a number of San Francisco’s active office requirements. According to industry reporting, roughly 65 percent of tenants in the market are seeking space under 15,000 square feet.
The property is considered a Class A building. It has a total of nine stories, which also includes a lower level. The asset also has 15,176 square feet of retail space. At one point, the property was occupied by the Loehmann’s Department Store. The vacant third floor of the building could be converted to office space with a conditional use permit.
222 Sutter is considered to be a transit-oriented property. It is located two blocks from the Montgomery Street BART station, MUNI light rail on Market Street and the under-construction Union Square Central Subway Station that is expected to open in October of this year.
The office building is located within the North Financial District neighborhood of San Francisco. The Class A space in this region has a current occupancy of 19.5 percent with total availability of 24.8 percent for the second quarter of this year, according to data compiled by CBRE. The Class A assets in this area total 20.4 million square feet.