A sleek San Francisco office building that began construction at the tail end of the city’s last tech boom changed hands for more than $100 million, a positive sign for a market still recovering from the fallout of the pandemic.
Locally based Strada Investment Group closed a deal to buy the property at 1 De Haro St. in the city’s fashionable Showplace Square District for around $103 million. The price of nearly $800 per square foot for the approximately 130,000-square-foot building reflects the stable presence of its sole tenant, Samsara, a so-called Internet-of-Things company that’s had its headquarters there since shortly after the building was finished in 2021.
The property is a rare case of a downtown San Francisco office building that’s managed to remain stably leased amid the challenging real estate climate of the last few years in the city. SKS Partners began work on the building in 2019 and soon after leased much of the building to Samsara, which later expanded to fill the entire structure.
Built on the site of a former gravel yard in the former industrial neighborhood, the building was the city’s first structure built using cross-laminated timber, an approach that uses prefabricated timber made by gluing layers of solid wood boards together at right angles. It’s gained popularity as a sustainable, lightweight alternative to steel and concrete in modern buildings.
“Designed to resemble a jewel box, its wooden core is enveloped by a shimmering glass curtain wall that illuminates at night, seamlessly integrating into its urban surroundings while making a distinctive architectural statement,” wrote SKS in describing 1 De Haro St.
“It’s beautiful and obviously brand new,” Strada Founding Partner Jesse Blout told CoStar News, noting that “Showplace Square is a dynamic neighborhood with a mix of startups and more established companies with a lot of great restaurants and shops.”
Comeback
The one-time design district has become increasingly popular in recent years among tech companies drawn to the area’s historic “brick and timber” facades and, more recently, its proximity to artificial intelligence hubs like Mission Bay. The neighborhood situated between saw big growth during the city’s last tech boom, but then tenants such as Airbnb and Zynga drastically shrank their footprints after the pandemic shutdown hit in 2020.
AI startups are also moving in among the tile stores and carpet wholesalers. Relatively recent arrivals include Together AI and OpenAI co-founder Sam Altman’s cryptocurrency startup Tools for Humanity as well as smart mattress retailer Eight Sleep. Nashville, Tennessee-based Vanderbilt University plans to open a full-time campus on the site of the California College of the Arts after the school closes at the end of the 2026‑27 academic year.
“A lot of demand is shifting to Showplace Square and the South of Market neighborhood particularly, as availability is dropping in Mission Bay,” JLL senior analyst Chris Pham recently told CoStar News.
While San Francisco's office vacancy rate is still above 21%, given years of move-outs and the large inventory of legacy space yet to be repositioned, it has begun to fall as a growing number of startups have signed leases to accommodate expansions or occupy new space in the city.
Office rents are also stabilizing, especially at the upper end of the market, in buildings with “hospitality‑inspired services” and “modern configurations suited to hybrid work,” illustrating improving tenant confidence and the depth of demand for best‑in‑class space.
The city has seen a handful of office buildings in downtown San Francisco change hands for above $100 million, including Yoda PLC’s nearly $700-million acquisition of the iconic Transamerica Pyramid and two neighboring office buildings earlier this year. The return of big-ticket deals comes as office leasing volumes in San Francisco recently hit their highest levels since 2019, led by the fast-growing artificial intelligence sector, according to CoStar research.
Strada has been an active investor in San Francisco in the post-pandemic era, scooping up the 255,000-square-foot office building 201 Spear St. for $67 million in early 2024 and constructing two apartment projects, the Brady and Quincy. The developer submitted plans last year to build two residential buildings with some 1,500 new homes at 88 Bluxome St., which once housed the city’s oldest and largest tennis club.