DivcoWest to Buy Nearly Half of 101 California Tower for $450M

DivcoWest has agreed to purchase a nearly 50% stake in 101 California, the cylindrical 48-story office tower near the Embarcadero, in a transaction valued at roughly $450 million for the partial interest and valuing the building at nearly $1 billion. The deal, which had not closed as of the reporting, is being watched as a barometer for San Francisco’s post-pandemic commercial real estate recovery.

The ownership group of 101 California is led by the Singaporean sovereign wealth fund GIC and includes other institutional investors. The buyer’s decision to acquire less than a majority interest is notable: by taking a partial stake, the purchaser can skirt higher property taxes that come with a full reassessment under California law, a consideration that has shaped recent deal structures across the city. Sources said DivcoWest had been "strongly pursuing" many of the recent office sales in the city and emerged with the winning bid on this marquee asset.

The tower contains about 1.2 million square feet and is nearly fully leased, which developers pitched as a low-risk investment amid a high-interest-rate environment and with the building’s loan not maturing until 2029. The previous majority owner sold its stake in 2012 for more than $900 million; the current valuation near $1 billion signals renewed investor appetite for stabilized, well-located office assets in San Francisco’s Financial District and Embarcadero waterfront.

Built by Hines in 1982, 101 California underwent a $75 million ground-floor renovation in 2023 that converted an old bank into a café and lounge and added a tenant-only gym below ground. Those upgrades have been part of a broader citywide trend of landlords investing in amenity improvements to retain and attract tenants in a market still reshaping after the pandemic.

DivcoWest has been active locally this year. In April the firm partnered with Blackstone to buy the empty office tower at 300 Howard Street, a building that is slated to be leased to Anthropic once renovations are complete. DivcoWest declined to comment on the 101 California transaction.

For San Francisco residents, the sale matters for several reasons. It reflects growing confidence among institutional buyers in downtown office demand, which can stabilize jobs for building service workers, restaurateurs and transit riders who depend on weekday foot traffic. At the same time, the structuring of the deal to avoid reassessment means the city and county are unlikely to see an immediate boost in property tax revenue from this transaction.

The next steps to watch are closing consummation, any announced changes in building management or tenant strategy, and whether similar partial-stake deals become a standard way for investors to buy in without triggering reassessments. The outcome will help determine whether the Financial District’s recovery gains momentum or remains a cautious, incremental rebound.