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Dropbox HQ in S.F.’s Mission Bay Gets Sold For Over $1B

In what is considered the highest per-square-foot sales price for a major property in San Francisco, Kilroy Realty Corp. has agreed to sell The Exchange on 16th located at 1800 Owens St. in Mission Bay for $1.08B in a deal that is expected to close at the end of March, according to a company statement.

Information about the buyer was not disclosed.

Rendering of The Exchange in San Francisco.

“This transaction demonstrates that quality assets in quality locations remain highly attractive to buyers and in this case generated a record price,” KRC CEO John Kilroy said in the statement. “The return we achieved from development to disposition clearly highlights the value we have created through our development program. In addition, the strong price underscores the embedded value of our stabilized portfolio, which is well-leased, modern and highly sustainable.”

Construction on the 750K SF property that cost $585M began in 2015 and has most notably served as Dropbox Inc.'s headquarters since 2017, when the company signed a 15-year lease. More recently, Vir Biotechnology subleased 134K SF from Dropbox for lab and office uses.

“This is a resounding sign that people are still excited to be a part of San Francisco and its future. I want to thank Kilroy Realty for their ongoing partnership and collaboration, and recognize them for how they continue to use their development expertise to move forward positive projects that help our economy grow and support the future of our city,” San Francisco Mayor London Breed said in a statement.

Kilroy will reportedly use proceeds from the sale to “fund development, for acquisitions, and for other general corporate purposes, including potentially paying down debt, repurchasing stock or paying a special dividend to the company’s common stockholders.”

The Exchange recently became the largest WELL Certified project in S.F. and is the city’s first to receive the WELL Core and Shell Certification, according to a spokesperson for KRC. As of the end of last year, KRC’s portfolio totaled about 14.6M SF with 94.3% leased.