Canadian Pension Fund Hit Hard by Plummeting Value of San Francisco Office Property

The Canada Pension Plan Investment Board (CPPIB) has suffered a significant loss following the sale of its stake in a San Francisco office complex. 

The pension fund sold its 45% share in the 1455 Market St. property to Hudson Pacific Properties (NYSE: HPP) for $43.5 million, a mere fraction of the $219 million it had invested in 2015. The sale was first reported by the San Francisco Business Times.

The building, which once housed the headquarters of tech giants Uber and Block (formerly Square), has seen its value plummet by approximately 80% due to the departure of these high-profile tenants. The pandemic drastically altered the office landscape in San Francisco, with many companies embracing remote work and reducing their need for downtown office space.

Hudson Pacific Properties, the majority owner of the 1 million-square-foot complex, plans to lease the vacant space and eventually sell the building. The company remains optimistic about the long-term demand for office space in San Francisco despite the current challenges faced by the sector.

The sale of 1455 Market St. follows a series of transactions involving its real estate investments at substantially reduced prices. In February, CPPIB sold its 29% stake in 360 Park Avenue South in New York to to Boston Properties for a total of $1, with the buyer also assuming the associated debt. 

Information for this story was found via the San Francisco Business Times, and the sources and companies mentioned. The author has no securities or affiliations related to the organizations discussed. Not a recommendation to buy or sell. Always do additional research and consult a professional before purchasing a security. The author holds no licenses.

Leave a Reply