Peninsula Land & Capital Could Buy SF Office Tower

Roger Fields of Peninsula Land & Capital is close to a deal to buy a Wells Fargo building in San Francisco. The expected sale price: $42.6 million.

The principal of the Palo Alto-based commercial real estate firm has surfaced as the would-be mystery buyer of the 13-story office building at 550 California Street, in the Financial District, the San Francisco Business Times reported, citing unidentified sources.

Fields and the San Francisco-based bank have agreed on a nonrefundable deposit — meaning the deal may be nearly done.

The 355,000-square-foot office tower could become the first in San Francisco to sell for a huge discount as vacancies soar while tenants shift to remote work.

Last month, Wells Fargo Bank had found the unidentified mystery buyer for the 63-year-old building, expected to sell for between $42.6 million and $46 million, or between $120 and $130 per square foot.

Fields has negotiated for a sale at $120 per square foot, or $42.6 million, according to Business Times sources.

Wells Fargo bought the building in 2005 for $108 million, or $304 per square foot.

In June of last year, the bank tapped JLL to list the building for $160 million, but got no takers because of plunging office values. Bids reportedly came back at $110 per square foot, or less than $40 million.

Wells Fargo is vacating the building, built in 1960, as employees shift to a hybrid remote work model. Last year, it announced it would cut costs by whittling its real estate holdings by 7 percent.

Last summer, the bank renewed its lease for another decade in a 622,300-square-foot office building at 333 Market Street. The 33-story tower was listed last fall for an undisclosed price.

It also ended its 20-year run at 45 Fremont Street, a 34-story skyscraper where Wells Fargo had leased 146,500 square feet.

The bank has hung on to its headquarters at 420 Montgomery Street, around the corner from the building being sold in what could be a $65 million loss at 550 California.

One out of three offices in San Francisco — or 26 million square feet of space — sits vacant. If the deal closes, Fields would buy his first office building in San Francisco. In March, his Peninsula Land & Capital filed a builder’s remedy application in Palo Alto for a 65-foot tall apartment building at 300 Lambert Street.

— Dana Bartholomew