In a year when Airbnb and Twitter’s low-slung headquarters have traded hands for huge prices, the sale of North Financial District office towers are starting to seem like bargains.
That’s become even more apparent now that New York-based real estate titan Tishman Speyer (ASX:TSEYF) has a deal to buy the 31 office floors of the 42-story 333 Bush tower, as The Registry first reported Monday.
The full price – $380 million – makes it one of the biggest San Francisco office sales of this market cycle, according to a Real Capital Analytics database. The sale also would bring a 44 percent return for sellers AEW Capital Management and DivCore, which bought the building in 2013 and poured $7.5 million into lobby and tenant renovations.
But when broken down to just less than $700 per square foot, the deal is dwarfed by those aforementioned tech headquarters sales. Airbnb headquarters at 888 Brannan sold for $720 a square foot while Twitter (NYSE: TWTR)’s headquarters at 1355 Market sold for about $875 a square foot.
The contrast underscores the new office market playing field with rents at an all-time high. While San Francisco office towers are still a pretty sure bet, they won’t get you as big of a haul if you shine up old digs and lease it up to a household name.
Read more: San Francisco Business Times (blog) Are Financial District office towers now real estate bargains?