At a time when work from home has become a trend and most of the offices are lying vacant, there some good news for office real estate. The Mission Bay headquarters complex has been sold for a record price of USD 1.08 billion. The four-building complex was once the headquarters of Dropbox. The complex is known as the Exchange. This is only the second building in the history of San Francisco to fetch over USD 1 billion for a single property. The owner of the Exchange, Kilroy Realty said that it has sold the 750,000-square-foot property. The per square foot price of the property at 1800 Owens St. is USD 1,440, the highest of any transaction in the city history.
Embarcadero was sold for USD 1.2 billion in 1998. The notable thing is that the amount much more than what the Transamerica building fetched in 2022. It was sold for just around USD 700 million. Embarcadero was almost four times as big as the Exchange. The final deal is expected to close at the end of this month. Kilroy Realty has so far refused to reveal the name of the buyer. According to a source privy with the development, the complex is being purchased by KKR. KKR is a private equity giant. The company has refused to comment on the development.
Dropbox had signed a 15 years lease for the building in 2017. However, it is now clear how much of the office is still being used by the data storage provider. This is because after the coronavirus pandemic hit last year, Dropbox announced that it is going to “Virtual First” company. The company said that working from outside the office will be the primary experience of its employees. In a latest quarterly earnings report, Dropbox had said that it was planning to sublease a portion of its office space. The company had reported USD 398 million in ‘impairment charges’ in the final quarter of 2020. Silicon Valley has seen a trend of some of the high profile companies walking away as the COVID-19 pandemic has set the trend of work from home.
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