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345 Fourth St. Image courtesy of CommercialEdge
The brand-new office building at 345 Fourth St. in San Francisco has come under new ownership, courtesy of an off-market transaction valued at $52.8 million. Taipei Economic and Cultural Office acquired the 56,000-square-foot property from 4th & Harrison SF LLC, an entity of real estate company T2 Hospitality, and will occupy the Class A property in its entirety.
Located in the city’s SOMA neighborhood, 345 Fourth is just one block from the new Central Subway Extension and within blocks of a BART station. Stanton Architecture designed the seven-story tower which features office-level balconies, a rooftop terrace, ground-level retail and a grade-level passageway with various outdoor spaces providing coworking and amenity options. The building also incorporates a bevy of sustainable features ranging from exterior sunshades to a vegetated roof.
READ ALSO: What’s Ahead for the Office Sector in 2023
TECO will relocate to 345 Fourth from its current home just 1 mile away at 555 Montgomery St., intending to remodel the interior of its new home. The move will mark an upgrade in accommodations, taking the company from space in a multi-tenant office building built in 1984, to a state-of-the-art corporate tower that delivered in 2022.
TECO relied on Tenny Tsai, Tom Christian and Andrew Hsu of Cushman & Wakefield, along with SV Commercial Property Brokerage Inc.’s Danny Yu for representation in the transaction. Barry Bram of Brookwood Starboard stood in for the seller.
Big deal
San Francisco’s office market has yet to make a post-pandemic comeback, but lackluster fundamentals have hardly translated into fire sales. The trade of 345 Fourth at more than $940 per square foot is in line with the average sale price per square foot for San Francisco office assets in 2022, which was roughly $900 per square foot, according to Kidder Mathews‘ research.
The metro’s office market didn’t precisely see a flurry of sales activity in 2022. Amid rising interest rates and a frosty financing environment, transactions totaled less than $1 billion in 2022, marking a low not seen since 2009, as per fourth quarter 2022 research from Colliers. However, change is on the horizon.
“Office investment sale activity is forecasted to be muted during the first half of the year with more activity projected through the second half of the year coinciding with increased demand and activity in the leasing market and unfreezing of the debt and capital markets for office assets,” according to the Colliers report.
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