State Bar Of California Selling, Vacating San Francisco HQ
The State Bar of California is preparing to sell its headquarters in San Francisco, leaving its home of nearly 30 years and likely downsizing in the process.
The State Bar purchased the 250K SF building at 180 Howard St. in 1995 for $22.5M. Cushman & Wakefield will handle the sale of the 13-story office building and will assist the Bar in finding a new space to buy or lease in the Bay Area, it noted during an agenda meeting on April 19. The San Francisco Business Times first reported the listing.
A spokesperson for the State Bar, Teresa Ruano, told the San Francisco Business Times that the State Bar has needed less space due to the implementation of a hybrid work schedule, only requiring employees to be in the office two days per week. Additionally, finances have been strained due to untenable maintenance expenses and an increasing inability to lease floors in the building to other tenants.
Ruano said the Bar will do a brief leaseback on the building. An agenda breakdown for the Board of Trustees indicates it discussed the sale price and leasing terms at 180 Howard St. during a closed session in March, but it has not publicly shared what it is seeking. The board is expected to vote on the contract May 19.
Public records indicate the State Bar got a $10M loan from Bank of America in 2016 for tenant improvement at its headquarters. It entered into another loan agreement with Sterling National Bank in August for more than $20M with the intention of paying off the Bank of America loan.
State governments and public entities across the country have been reducing office space as hybrid work options are lessening their space requirements and they seek ways to maximize taxpayer dollars.
Office vacancies continue to plague San Francisco in particular in the face of the same downsizing trend. San Francisco’s office vacancy rate was 21.7% in Q1 of this year, up 180 basis points from Q4 2021 in the face of 1.5M SF of negative net absorption, a recent Cushman & Wakefield study said. High-profile vacancies in the city this year include PayPal, which plans to move from its 425 Market St. location. And all eyes are on the Twitter HQ amid murmurs Elon Musk could relocate it to Texas.