The Mission Bay headquarters complex leased by Dropbox is selling for $ 1.08 billion, the second highest price in the history of San Francisco for a single property.
Owner Kilroy Realty said Monday it had agreed to sell the 750,000-square-foot property for about $ 1,440 per square foot, the highest price per square foot in city history. The complex with four buildings in 1800 Owens St. is termed the scholarship.
The deal would obscure all previous transactions, except for the $ 1.2 billion purchase in 1998 of Embarcadero Center, which is about four times the size of the exchange. It is expected to close by the end of this month.
Kilroy Realty did not want to name the buyer. A source with knowledge of the deal who is not authorized to speak in public said it was KKR, the private equity giant. KKR did not immediately respond to a request for comment.
The coronavirus pandemic disrupted San Francisco’s boom in real estate, with almost no major leases signed last year, and numerous companies, including Dropbox, adopted a permanent remotely policy for work. But the scholarship continues to appeal to tenants, including in the growing biotechnology sector, as it can be set up as a laboratory space. After Dropbox listed about half of the building for subletting, For Biotechnology took 133,896 square feet at the end of last year.
“This transaction shows that quality assets at quality locations remain very attractive to buyers and in this case yielded a record price,” John Kilroy, CEO of Kilroy Realty, said in a statement.
Kilroy spent about $ 585 million on building the exchange and in 2017 leased all the office space to Dropbox, which at the time was the city’s largest lease. Facebook’s lease agreement for the entire Park Tower in the Transbay district set a new record in 2018.
The sale follows the sale of $ 650 million from the Transamerica Pyramid during the pandemic and a $ 420 million deal last week for Uptown Station in Oakland, which is leased by Square.
“This is a clear sign that people are still excited to be a part of San Francisco and its future,” Mayor London Breed said in a statement.
The sale will be a windfall for the city, generating $ 64.8 million in property tax. The tax bill is twice as high as it would be in 2020, after voters passed Proposition I in November to double the sales tax on sales from more than $ 25 million to 6% from this year. Kilroy gave $ 225,000 to oppose the measure.
The exchange’s annual property tax bill of about 1.2% will also rise to nearly $ 1.3 million. It was estimated at $ 789 million in 2019, yielding nearly $ 9.5 million, making it the ninth most valuable property in the Bay Area.
KKR is one of the largest US private equity firms with a net income of $ 1.94 billion last year. It has invested in hundreds of companies and owns the San Francisco fitness operator Bay Club. His technical investments include ByteDance program maker Lyft and Tik Tok.
Kilroy is one of the largest landlords on the West Coast and owns buildings leased by technology companies, including Adobe, Salesforce and Netflix. Stripe moves from San Francisco to Kilroy’s Oyster Point project in southern San Francisco, which also includes biotechnological space.
Roland Li is a staff writer for the San Francisco Chronicle. Email Address: [email protected] Twitter: @rolandlisf