A Market Street office building has sold for less than half of its pre-pandemic value.
Fountainhead Development swooped in to buy the historic 800 Market Street building, dubbed by locals as the “Flatiron Building,” for $17.2 million, the San Francisco Chronicle reported. The seller was Invesco, which acquired the property in 2011 for $51 million, putting the current deal at a 60 percent drop in value.
The sale price comes to about $354 per square foot, compared with $1,100 or so more than a decade ago, according to the San Francisco Business Times. The transaction marks the second San Francisco deal for Fairbanks, Alaska-based Fountainhead after buying 795 Folsom Street last year for $48.3 million.
The building is across the street from San Francisco Centre, the beleaguered mall that has been bleeding tenants since falling into loan default two years ago. The bargain-basement sale price aligns with recent Yardi Research data claiming 67 percent of offices in San Francisco have sold for less than their previous values in the past two years.
Fashion brand Diesel had a 10,000-square-foot flagship on the ground floor of the 800 Market Street building, but it closed its doors in 2021. Prior to that, in 2018, the building housed the first location of WeWork’s “HQ by WeWork” program, which offered standalone private offices for mid-sized companies. WeWork ended up moving to terminate its lease commitments at several downtown San Francisco, including at 800 Market, by 2023.
New owner Fountainhead plans a long-term “public-facing” activation for the ground-floor retail space, according to the Business Times.
“We love this building — frankly, it’s one of the most unique office buildings that I’ve been in,” Wyatt Cerny, Fountainhead’s vice president of real estate, told the Chronicle. Under previous ownership, the structure underwent an “extensive renovation” more than a decade ago that “brought it up to modern standards.
“It’s got the flatiron shape. You go in and there are creative offices that have perfect floor plate sizes — 5,600 square feet,” Cerny said.
The goal is to revive the intersection of Market, Ellis and Stockton Streets. Forever 21 closed its flagship at 2 Stockton Street in 2019 with the three-story property still vacant today; Disney followed in 2021 by departing 39 Stockton Street. “We want to bring life and energy back to that corner,” Cerny said.
— Chris Malone Méndez
Read more
WeWork grows its new “HQ” line with San Francisco deal
Invesco trades SF office building to Flynn Properties and Ellis Partners
SF office prices plummet as 67% sell at discounts: Yardi
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