By Jon Peterson
UBS Realty Investors has placed up for sale the 374,203 square foot 455 Market Street office building in downtown San Francisco. The pricing guidance on the sale is $280 million or $750 per square foot, according to several sources that realize the property is up for sale.
UBS has hired the San Francisco office of Eastdil Secured to be the listing agent on the sale and to help make the property. UBS did not respond to emails seeking comment for this story. Eastdil has been contacted and decided to give no comment on their efforts around this offering.
Sources that either are investors or companies that track the sale of office buildings in San Francisco feel the planned sale of 455 Market will be a good test for the interest of major investors in the San Francisco office market. Most of the limited amount of office sales in San Francisco has been with single-tenant and strong credit tenant properties, which has not taken into account some of the current circumstances and market dynamics, such as high vacancy and availability.
455 Market is a multi-tenant property with some larger, decent credit tenants. One of the building’s main tenants is Hinge Health Inc., which according to the company’s website is listed as its headquarters.
This type of asset has not been the main focus of investment for many institutional capital sources that are looking for office buildings to acquire in 2022, according to industry sources. This property will be the first multi-tenant office asset in San Francisco brought to the market for sale since the pandemic started in 2020.
UBS has been the only property owner this asset has ever had. The real estate manager was the original manager and developer of the property when it was first constructed in 1987. The office building is now 80 percent occupied, which many industry sources believe represents good occupancy given what has been going on with the overall office market in San Francisco.
455 Market is located within the Financial District submarket of San Francisco. The current vacancy in this area is 22 percent, according to data compiled by the San Francisco office of CBRE. The total amount of space that is available is in excess of 28 percent. The size of the office market in this part of San Francisco totals 27.1 million square feet, according to CBRE’s reporting.