Former Zendesk HQ Headed To Auction Following Steep Drop In Valuation
The former Zendesk headquarters at 1019 Market St. in downtown San Francisco is headed to a foreclosure sale after losing nearly 80% of its value, the San Francisco Chronicle reported.
The seven-story, 77K SF building, once touted as a symbol of the city’s tech resurgence, was recently appraised at $14.7M, down from $71.4M in 2019, according to Morningstar.
Owner 1019 Market St. LP, an investment fund managed by Deutsche Bank, paid $48M for the property in 2014 but defaulted on its mortgage in April.
Chicago Title Co. filed the foreclosure notice in August. The property reported 3% occupancy since Zendesk vacated its 97% portion of the building in 2022, the Chronicle reported, citing Morningstar data.
The historic property once benefited from San Francisco’s “Twitter tax break,” a payroll tax exemption that lured companies like Zendesk and Uber to Mid-Market, before the pandemic hollowed out the neighborhood. Those companies were brought in to turn the tide in a neighborhood that had previously been described as a “dead zone.”
The city made several attempts at revival in the area since the pandemic began, including transforming UN Plaza into a skate park in 2023. Uber, Block and X have all left in recent years, and retailers have shuttered.
Total direct office vacancy in Mid-Market was at 34.4% in the second quarter, according to Avison Young.
