An institutional-quality office tower in San Francisco’s South Financial District has been brought to market with pricing guidance that would rank among the city’s highest post-pandemic valuations. The 383,000-square-foot property at 221 Main St. serves as the headquarters location for software firm Docusign Inc., according to reporting from the San Francisco Business Times.
The building is owned by Pimco Prime Real Estate and is managed by Columbia Property Trust, the Business Times reported. Market sources cited in that coverage indicated that guidance for a potential sale is around $250 million, positioning the asset at the upper end of recent investment sales benchmarks in the city.
The property’s occupancy has been significantly strengthened by Docusign’s recent decisions regarding its space needs at 221 Main St. The Business Times reported that the tenant recommitted to the building and executed an expansion, as well as that a subsequent series of new leases has pushed the asset to near full occupancy. Those commitments have helped to stabilize the rent roll at a time when many San Francisco office assets are contending with elevated vacancy.
Docusign expanded its footprint at 221 Main St. last fall, increasing its presence by nearly half, the Business Times reported. The company now occupies approximately 140,000 square feet in the building, making it a major tenant at the property. The headquarters role of the location, combined with the tenant’s decision to grow rather than contract its footprint there, adds to the building’s profile for prospective buyers.
Based on the reported pricing guidance, the target transaction value equates to roughly $650 per square foot for the 383,000-square-foot asset. According to the Business Times, that level would place the offering near the top of the pricing spectrum for San Francisco office trades in recent years. The guidance stands out in a market that has seen values and leasing fundamentals come under pressure since the onset of the pandemic.
Market observers view the offering as a notable test of investor appetite for well-leased, headquarters-anchored office assets in San Francisco’s core districts. The combination of near-100% occupancy, a large technology tenant that has recently expanded on site, and institutional ownership and management could make the property a bellwether for pricing of stabilized assets in the South Financial District.
An image associated with the offering shows the exterior of 221 Main St., highlighting its urban setting within San Francisco’s financial core. The Business Times also noted that Docusign recently rebranded its corporate name from DocuSign, a change that is reflected in references to the headquarters property.
