DivcoWest has completed its purchase of a 47.5 percent stake in 101 California Street, finalizing San Francisco’s largest office transaction in more than four years and converting a closely watched listing into a concrete signal that trophy capital has returned to the Financial District.
The deal closed last week, according to industry sources with direct knowledge of the transaction who spoke with The Registry on the condition of anonymity. DivcoWest’s stake landed at 47.5 percent, and both Singapore’s sovereign wealth fund GIC and original developer Hines remained in the ownership structure in some capacity. Eastdil Secured brokered the transaction. The trade values the 1.26 million-square-foot tower at roughly $975 million, or about $775 per square foot, and is expected to total approximately $450 million.
The closing caps a sale process first reported in January, when DivcoWest emerged under contract for the stake. The seller, the Hong Kong Monetary Authority, has now exited its position in the 48-story building, while GIC retains a holding of just under 50 percent. Houston-based Hines, which developed the property in 1982, stays on as operating partner with roughly 5 percent ownership.
The transaction stands as the largest traditional office sale in San Francisco since an $800 million trade in September 2021, according to industry reports. For a market that spent four years defined by distress, the close marks a decisive shift in narrative. DivcoWest’s representatives did not respond in time of publication.
DivcoWest prevailed over a crowded field of institutional heavyweights, outbidding Ares Management, Blackstone, Brookfield and Elliott Investment Management, according to sources in the industry. That level of competition for a single stake underscores how sharply investor appetite has narrowed toward the highest-quality assets, even as the broader market continues to sort through vacancy.
The pricing tells the story of that divide. The sale reflects a decline of roughly one-third from the building’s $1.47 billion appraisal during a 2019 refinancing, when the ownership group secured a $775 million loan at 4.18 percent interest maturing in 2029. Yet DivcoWest’s number came close to expectations set when the listing launched in September, a result that has encouraged local market participants and suggested trophy towers have defended their value far better than lower-tier properties trading at steep discounts.
The contrast with the prior year’s benchmark is stark. San Francisco’s largest traditional office sale in the preceding year involved a distressed downtown tower that changed hands for roughly a quarter of its 2019 price. In that transaction, also brokered by Eastdil, a DRA Advisors partnership paid $185 million, or $241 per square foot, for the 767,000-square-foot Market Center, down from $722 million in its previous sale.
101 California’s fundamentals help explain the premium. The tower is 88 percent occupied and anchored by a roster of credit tenants. Fintech company Chime occupies nearly 200,000 square feet, and law firm Morrison & Foerster recently signed a 112,000-square-foot lease as part of its relocation from 425 Market Street. Morrison & Foerster is trimming its footprint from 220,000 square feet, but its decision to move to the premium Financial District tower rather than remain in a secondary building exemplifies the “flight to quality” reshaping the market.
Ownership has invested heavily in that positioning. Hines and its partners completed a $73 million renovation in 2023, overhauling the lobby, outdoor plaza and tenant amenities with a café, lounge, tenant-only workspace and fitness center. Ground-floor restaurant Pabu Izakaya is expanding with a sake tasting bar in the building’s plaza.
The close arrives as San Francisco’s office sector posts its strongest recovery signals in years. Artificial intelligence companies leased more than 800,000 square feet in the first half of 2025, according to CBRE research, while total leasing activity registered back-to-back quarters above 2.8 million square feet. Total vacancy eased to 35.1 percent from 35.8 percent in the prior quarter, the most significant improvement since early 2015, according to CBRE, and sublease availability has fallen for eight consecutive quarters to its lowest point since the second quarter of 2020, according to Avison Young. San Francisco’s office sales volume reached $1.1 billion in the first half of 2025, sixth among the top 25 U.S. markets, with properties trading at an average of $237 per square foot against a national average of $189, according to some reports.
For DivcoWest, the acquisition deepens a San Francisco bet that has already paid off. The firm and CalPERS paid $356 million in 2022 for the 318,000-square-foot former Old Navy headquarters at 550 Terry A. Francois Boulevard, planning a life-science conversion; late last year, OpenAI agreed to fully occupy the building. The firm has also recently purchased a research-and-development building in North San Jose and a boutique office building in Redwood City. GIC and the Hong Kong Monetary Authority originally acquired their stakes in 101 California in 2012, buying 92 percent from Nippon Life Insurance and 3 percent from Hines in a deal that valued the building at $910 million.
