- Prebys Foundation purchased the Wells Fargo Plaza for $40M in cash, a $108M discount from its 2004 price, signaling a long-term investment in downtown San Diego’s revival.
- The 24-story, 488K SF tower is 75% leased, with significant sublease availability, as downtown office vacancy soars to nearly 35%.
- Seller Irvine Co., San Diego’s largest office landlord, continues to offload downtown assets to pivot toward residential development in University City.
- The purchase sets a new market baseline of roughly $80 PSF along the distressed B Street corridor.
Betting on a Comeback
Prebys Foundation bought Wells Fargo Plaza for $40M—less than a third of its 2004 price, per Globe St. The foundation views the acquisition as a civic investment and an opportunity to contribute to the city’s economic revitalization.
“We really care about downtown,” said Grant Oliphant, Prebys Foundation CEO. “If we care about its fate, then maybe we ought to be a stakeholder.”Founded in 2016 after the death of developer Conrad Prebys, the nonprofit holds more than $1.1B in assets and gave out over $53M in grants in 2023. The foundation previously made headlines for selling its multifamily portfolio to Blackstone for over $1B in 2021.
Deep Discounts, Big Moves
The tower, located at B Street and Fifth Avenue, spans 488K SF and is currently 75% leased—but once sublease space is factored in, available space balloons to over 250K SF.
The sale underscores how far office valuations in San Diego have dropped. Last September, Irvine sold the nearby Symphony Towers for just $46M—a 70% haircut from its 2003 price tag. As Irvine pivots to developing 30K residential units in University City, it’s steadily retreating from downtown holdings. The sale of Wells Fargo Plaza sets a striking new price benchmark of $80 PSF for the area.
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A Downtown in Distress
San Diego’s downtown office market is facing historic challenges, with vacancy rates hitting 35% in 2025—more than double pre-pandemic levels. The turmoil has triggered a string of distressed sales and foreclosures.
- Last week, Alaska Permanent Fund handed over Five50West to lender Barings in lieu of foreclosure. Despite a $13M Gensler-led renovation in 2023, the building remains nearly half empty.
- In February, AllianceBernstein initiated foreclosure proceedings on Stockdale Capital Partners’ 1.3M SF Campus at Horton, a downtown mega-project now facing more than $351M in unpaid debt.
- Plans for the city to relocate municipal offices to the Horton project fell through in December amid San Diego’s projected $1.5B budget shortfall over the next five years.
Why It Matters
The Prebys Foundation’s entry into downtown San Diego’s commercial real estate market is unusual for a nonprofit—but may signal confidence in the long-term potential of the city’s urban core. With developers and landlords under pressure and prices in freefall, mission-driven capital could play a role in shaping the next chapter of downtown’s evolution.
As Oliphant put it: “We are looking at trying to be a presence in the continued rebirth of downtown.”
