Investment firm Ganmi Corp., led by a former SoftBank executive, acquired a pair of downtown San Diego office towers for just over $100 million — in the latest sale in the neighborhood at prices well below prior deals for the same properties.
Downtown San Diego is among several urban hubs nationwide dealing with lingering high office vacancies, especially for older buildings, though there have recently been signs of recovery in the U.S. office market.
Ganmi’s phased plans for its newly acquired towers include premium food halls and other hospitality-level amenities intended to reposition the buildings into “experience-driven” destinations that bring corporate tenants and workers back to downtown.
“Our philosophy is simple: build places that people want to be in,” Ganmi CEO Eric Gan said in a statement. Gan is a former executive with Tokyo-based SoftBank, a major global investor in technology and other industries.
San Diego-based Ganmi said it acquired downtown’s 27-story One Columbia Place at 401 W. A Street and the nearby 12-story Two Columbia Place at 1230 Columbia St. through its sponsored investment fund Golden Columbia.
The purchase price was not disclosed by the buyer or seller, but CoStar data and public filings showed the combined price at about $103.5 million — less than half what the prior owner paid for the towers in 2021. The buildings, constructed in 1982 and 1990, were sold by Los Angeles-based Regent Properties.
The Ganmi statement said the acquisition “marks the launch of a long-term repositioning strategy” intended to update the towers with amenities rooted in Japanese hospitality.
“People don’t come back to the office for desks alone — they come back for energy, community, and convenience,” said Casey Gan, the company’s chief financial officer.
Downtown sellers
The deal comes as downtown San Diego, for decades a buy-and-hold enclave where office towers rarely changed hands, has seen multiple properties sold during the past two years. The most prominent seller was Irvine Co., once downtown’s largest office landlord, which disposed of all six of its towers at prices well below their previous deal costs.
Newport Beach-based Irvine Co., among California’s largest office owners, said it was looking to reposition its resources to other faster-growing areas, including San Diego’s University Town Center neighborhood to the north of downtown. Often referred to as San Diego's "second downtown," UTC has steadily been building up its office, retail and multifamily developments since the late 1970s.
Many of the new downtown San Diego tower buyers are smaller, private investment firms planning new amenities and other renovations designed to add residential, retail and other non-office elements.
The turnover comes as downtown San Diego offices are struggling with vacancies that began rising several years ago, a problem exacerbated by pandemic trends that pushed companies into remote and hybrid workplace arrangements. The latest CoStar data showed downtown’s office vacancy rate at 34.5%, well above the San Diego regional rate of 12.7%.
“Like a lot of downtowns across the country, San Diego’s has seen vacancy climb to a peak since the pandemic, as occupiers spread out from the central business district into more suburban neighborhoods close to employees and neighborhood amenities,” said Joshua Ohl, CoStar’s senior director of market analytics in San Diego.
Since the start of 2024, Ohl noted about 30% of downtown San Diego’s office inventory has changed hands. “The latest transaction continues the trend of office towers selling to a new ownership class, and it closed well below the last sale price, allowing the buyers to be flexible with the asking rates,” Ohl said.
CoStar and public data showed former owner Regent Properties purchased the two Columbia-branded towers in June 2021 as part of a larger five-property downtown acquisition totaling $420 million. That deal put One Columbia Place at around $182.5 million and Two Columbia Place at about $41 million, for a total of $223.5 million.
For the record
Eastdil Secured presented the seller in the two-tower office sale and the buyer was self-represented. Ganmi Corp. appointed JLL’s Tony Russell, Richard Gonor, Pascal Aubry-Dumand and Ryan Taquino as leasing agents for both towers. CBRE will serve as property manager.