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Just a month after news surfaced that Gap Inc. wanted to sell the Athleta headquarters building at 1 Harrison St. in San Francisco, a Mountain View-based investor and developer is on board to buy it, according to the San Francisco Business Times.
Sobrato Organization is nearing a deal to buy the 171K SF office building near San Francisco’s Embarcadero. The company could pay as much as $80M, or $467 per SF, for the property, sources told the Business Times.
Gap purchased the building for $45M in 1999 and in January filed an exploratory zoning letter with the city to find out what uses could be allowed at the property.
Gap has struggled in recent years, along with many formerly formidable retailers from the heyday of the suburban mall, but its third-quarter 2022 earnings showed some positive signs when they were released in November. The company reported net income of $282M in the quarter.
Athleta’s net sales increased 6% year-over-year in Q3 to $340M, the company said, the second-fastest growth of Gap’s four brands behind Banana Republic. Gap opened 30 new Athleta stores in 2022 while closing about the same number of Gap and Banana Republic locations each.
Gap still owns its headquarters at 2 Folsom St. and last year finished a major overhaul of that 545K SF property. It laid off 500 employees in San Francisco and New York in September.
Also last year, Gap sold a former headquarters building for another of its brands, trading Old Navy’s stomping grounds at 550 Terry A. Francois Blvd. to DivcoWest for $356M. The purchase price for the 315K SF building came to a whopping $1,130 per SF.
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