410 Townsend Sale: What SoMa Office Deals Mean for Condos

$604 a square foot. That is what an affiliate of Zurich Alternative Asset Management paid for 410 Townsend, the brick SoMa building that once housed Yammer, Eventbrite and Zendesk, and it is more than double what the last buyer paid in 2024. Two days later, a nearly empty office pair on Howard Street sold for about $231 a foot.

Same neighborhood, same month, a 2.6x gap. The short answer for anyone shopping condos in South Beach, Yerba Buena or Mission Bay: SoMa office sales now show that well-located, leased buildings have bottomed and turned, while empty ones still trade near land value. And the condo market next door has not priced in the good half of that story yet.

Why a broker is calling 410 Townsend a round trip

The 410 Townsend sale is the first San Francisco office building to go from boom price, to distress price, and back up to a real recovery price, and that is why brokers are excited about it. Seth Siegel of Cushman and Wakefield, who ran the deal, called it the first "round trip" for a San Francisco office building.

The building sits on Townsend between Fourth and Fifth Streets, a short walk from the Caltrain terminal at Fourth and King. It is a 1912 brick and heavy timber structure of about 78,455 square feet, and it was roughly 65 percent leased at sale. New York Life Real Estate Investors and Bridgeton Holdings bought it for $22 million in April 2024, a deal CBRE brokered, about $64 million under what it sold for in 2019.

So the 2024 buyers more than doubled their money in about two and a half years. That is not a rounding error. It is a sign that at least some investors now think the bottom for San Francisco office is behind us.

The Howard Street sale is the other half of the picture

The Howard Street deal shows that empty SoMa office space is still priced like a problem. Hudson Pacific announced the $65.5 million sale on September 25. 875 Howard is a roughly 188,000 square foot office building, and 899 Howard is a roughly 96,000 square foot former retail building that was fully vacant. Hudson Pacific bought the pair in 2007 for $46 million, according to Hoodline's reporting.

These buildings sit between Fourth and Fifth on Howard, across from the Moscone Center, and a few blocks from 410 Townsend. The difference is not the address. It is the rent roll. A building with tenants and a story sells for $600 a foot. A building with a vacant shell sells for a price that starts to look like a bet on what the land can become.

That split matters for housing, because the empty buildings are the ones that eventually become something else.

What SoMa office buyers are betting on

Buyers are betting that AI companies keep filling San Francisco office space, and SoMa has the most room to fill. Cushman and Wakefield's second quarter 2026 report counted 2.9 million square feet leased by AI companies in the first half of 2026, which was 47 percent of all new leasing in the city. The city has now logged five straight quarters of positive net absorption.

SoMa is still the weak spot. The Real Deal reported SoMa office vacancy at about 47 percent in early 2026, compared with about 20 percent in Mission Bay. The San Francisco Standard's September look at SoMa describes Fifth Street as a dividing line, with recovery showing up to the east and harder street conditions persisting to the west.

One note on the vacancy numbers. Hoodline cited 29.2 percent for the second quarter while Cushman reports 30.1 percent. Brokers measure inventory differently, so both can be right. The direction, down about three to four points in a year, is what every source agrees on.

The condo market has not caught up

Here is the gap nobody else is talking about. While office buyers repriced 410 Townsend upward by more than 100 percent, the condo neighborhoods around it barely moved. Using our 12-month price history, South Beach went from about $1.19 million in September 2025 to about $1.23 million in August 2026. Yerba Buena, the blocks around Moscone Center and Yerba Buena Gardens, went from $1.12 million to $1.27 million, peaking at $1.37 million in May before easing back.

Over the same stretch, the San Francisco citywide median climbed from $1.89 million to $2.2 million. That citywide number is pulled up by single-family homes on the west side. So the right read is not that South Beach condos are a bargain in absolute terms. It is that the downtown condo market has been left behind by the rest of the city.

The South of Market neighborhood itself is harder to pin down. Its monthly median in our data swings from about $1.7 million in July to about $860,000 in August, which tells you sales volume is thin and the mix of lofts and towers changes month to month. The Standard reported a SoMa median condo price of $855,000 in June, up 15.7 percent from a year earlier. We would treat any single SoMa monthly number with caution.

How the four neighborhoods compare

The four neighborhoods around the office core score very differently, and the scores explain some of the price gap. Here is how they line up on our data.

South Beach, the waterfront strip along the Embarcadero from the Bay Bridge down to Oracle Park, pairs a 3.5 safety score with one of the better amenity scores in the city. Mission Bay, the newer district south of Mission Creek anchored by UCSF and Chase Center, scores highest on safety at 3.9. South of Market sits near the bottom of the citywide ranking, mostly because of its 1.9 safety score.

The way we read it: a buyer choosing between a South Beach two-bedroom and a Yerba Buena two-bedroom at similar prices is choosing between a 3.5 and a 2.2 on safety for roughly the same money. That is the kind of trade-off the listing photos never show.

What this does and does not mean

It does mean the office story in SoMa is no longer only about falling prices. At least one building has bounced hard, and AI leasing is doing real work in the vacancy numbers. When offices fill, the lunch crowd, the evening foot traffic and the retail on Third and Fourth Streets usually follow, and those are the things that move how a condo neighborhood feels day to day.

It does not mean South Beach condos are about to jump 16 percent. One building is one data point, and 410 Townsend is a small, characterful building that was already mostly leased. The honest downside is that the downtown condo market has lagged for years for reasons offices do not fix: high HOA dues, lots of competing inventory in the towers, and buyers who prefer a house in the Sunset to a view unit on Folsom. The Howard Street sale is a reminder that plenty of SoMa office space is still empty.

And I would argue that is the good news for housing. Empty office shells at $231 a foot are much closer to the math that makes conversions or new residential work, which is exactly what this part of the city needs. We looked at the neighborhood side of the AI office boom in our earlier piece on where AI offices are landing and what it means for nearby neighborhoods.

Questions people are asking

Did 410 Townsend really double in price?

Yes. It sold for $22 million in April 2024 and $47.4 million in September 2026, which is about 2.15 times the earlier price. It is still well below the roughly $86 million it sold for in 2019.

Who bought 410 Townsend?

An affiliate of Zurich Alternative Asset Management bought it from New York Life Real Estate Investors and Bridgeton Holdings. Cushman and Wakefield brokered the sale.

Is the San Francisco office market recovering in 2026?

The data says yes, slowly. Cushman and Wakefield put citywide vacancy at 30.1 percent in the second quarter of 2026, down from 33.8 percent a year earlier, with AI companies accounting for nearly half of new leasing in the first half.

Will office recovery raise SoMa and South Beach condo prices?

It can help, but it is not automatic. South Beach prices rose only about 3 percent over the past year on our data, while the city median rose about 16 percent. More office workers nearby supports demand, but HOA costs and tower inventory still weigh on downtown condos.

Which is safer, South Beach or SoMa?

On Houseberry's scores, South Beach rates 3.5 out of 5 on safety and South of Market rates 1.9. Mission Bay rates highest of the four at 3.9.

If you are weighing a downtown condo right now, the useful move is to compare the neighborhoods block by block before you compare the units. The office market just told you which parts of SoMa investors believe in. The neighborhood scores tell you which ones you would actually want to walk home through at 10 p.m.

Sources

• Connect CRE: Zurich affiliate acquires 410 Townsend
• Hoodline: Zurich investor pays $47.4M for SF's old start-up village
• CBRE: $22 million sale of 410 Townsend, April 2024
• Newsweek: 410 Townsend 2019 and 2024 prices
• Business Wire: Hudson Pacific sells 875 and 899 Howard
• Hoodline: Hudson Pacific sells nearly empty SoMa office complex
• Cushman and Wakefield: San Francisco Office MarketBeat, Q2 2026
• The Real Deal: Will spillover of SF office demand resurrect SoMa?
• The San Francisco Standard: SoMa is San Francisco's rise and fall, all at once
• Houseberry: San Francisco neighborhood rankings and price history