By Jon Peterson
New York City-based Thor Equities has placed on the market for sale the 46,752 square foot office building located at 634 Second Street in San Francisco. The potential sales price on the property could be $65 million, or around $1,390 per square foot, according to sources that track the sale of office buildings in San Francisco.
The seller has selected the San Francisco office of CBRE to be the listing agent on the sale. Kyle Kovac and Michael Taquino, both executive vice presidents, are involved for CBRE in the offering. CBRE declined to comment when contacted for this story.
Thor has been the owner of the property since February of 2017. The real estate investment firm had acquired the building for $40 million, or just over $855 per square foot, according to public records.
There are no vacancies in the property at this time. The property is presently fully-leased to Okta, which has subleased all of the office space in the building to Cloudflare. This lease will expire in September 2024, and Cloudflare will then go to a direct lease that runs until December 2027. The first floor of the building has been occupied by SAJJ Mediterranean, a restaurant, since 2016.
There will be a potential to add some more space and floors to the property in the future by the new ownership. An additional 16,000 square feet could be added to the three-story property through the addition of floors four and five, and the seller has hired Huntsman Architectural Group to design the addition. This added spaced doesn’t need a Prop M allocation, since it’s less than 25,000 square feet.
Since 2007, there has been significant amounts of capital invested in the property to increase the quality of the building. This included $6.1 million in building improvements and $2.5 million in tenant improvements. The work has included HVAC, mechanical, Title 24 upgrades, a brand-new roof and significant interior work.
634 Second is located a block and a half from Oracle Park. It is also two blocks from the 4th and King Caltrain station and is served by multiple MUNI bus lines. The current construction of the 4th Street Central Subway will further activate transportation from SoMa to Market Street when completed, and 634 Second will be two blocks from the closest station.