- LendingClub purchased the 21-story tower at 88 Kearny St. for $74.5M, marking a trend of “owner-user” deals in San Francisco’s office market.
- Shorenstein and Blackstone are preparing to sell 45 Fremont St., a 690K SF tower now more than 50% vacant.
- Office buildings in San Francisco are selling for steep discounts, with values down more than 60% from pre-pandemic levels.
- Falling prices are attracting non-institutional buyers, including tech firms, media companies, and healthcare systems.
New Ownership On Kearny
LendingClub acquired 88 Kearny St., a 21-story, 234K SF tower near the Financial District, per San Francisco Chronicle. The fintech company paid $74.5M—or about $318 PSF—for the building, which will become its new headquarters once its lease at nearby 595 Market St. expires next year.
Another Tower Hits The Market
Just blocks away, the 34-story tower at 45 Fremont St. is poised to enter the sales pipeline. Owned by Shorenstein and Blackstone, the 690K SF property is now more than half vacant, with former anchor tenant Slack having vacated all 13 of its floors. Blackstone wrote down its investment in the property to zero in 2022, but has expressed optimism in a broader SF rebound.
Discount Deals Becoming The Norm
Office properties in downtown San Francisco are now trading at an average of around $310 PSF—down from $800 pre-pandemic. LendingClub’s acquisition is part of a larger trend of owner-occupants purchasing real estate at discounted prices. Other recent examples include Hearst Corp.’s $47.5M acquisition of 450 Sansome St., and LinkedIn’s $75M cash purchase of a Sunnyvale R&D facility.
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Mounting Pressure On Owners
Market insiders say the pending sale of 45 Fremont is being driven in part by its lender, Bank of America, which issued a $347M loan for the building in 2019. The tower is being marketed by Eastdil Secured, and could become another benchmark in San Francisco’s post-pandemic office market reset.
Why It Matters
Institutional investors may be stepping back, but smaller firms and corporate owner-users are filling the void, capitalizing on some of the steepest commercial real estate discounts in the country. The shift is also signaling a gradual transformation of downtown San Francisco’s tenant and ownership mix.
What’s Next
As values reset and leasing activity begins to pick up, expect more “nontraditional” buyers to enter the fray. With Mayor Daniel Lurie pushing for economic revitalization, companies like LendingClub may be early movers in a long-term downtown recovery.
