The six-story office building at 1128 Market Street, once briefly in line to become a long-term shelter for women, is back on the auction block of San Francisco commercial real estate. East West Bank, which took control of the empty Civic Center property after the prior owner defaulted, has now put the building up for sale. The structure sits across from United Nations Plaza and has remained mostly dark since the pandemic significantly reduced downtown office demand.
According to CoStar, the lender began marketing the property this week. Commercial listings peg it at roughly 79,000 square feet of office space and highlight the potential to convert the building to housing, a familiar refrain in the current market. The online flyer on LoopNet lists Colliers as the broker. It presents the asset as vacant and available for sale, complete with floor-by-floor breakdowns and the marketing brochure that is making the rounds with investors.
Shelter plan stalled
Earlier this year, Community Forward SF finalized a contract to purchase 1128 Market and transform it into a 150-bed long-term shelter and drop-in center for women in crisis, providing a rare boost to a severely limited system. Financing delays, however, halted the deal. The San Francisco Chronicle reported that the nonprofit had been counting on a Prop A carve-out for survivors. It noted that only about 100 of the more than 3,000 shelter beds in the city are currently designated for women. Sammie Rayner of Community Forward told the Chronicle the group is still hopeful now that the city has issued a request for information for survivor housing. The Chronicle and the Mayor's Office RFI outline the outreach to organizations seeking funding.
Bank ownership and market context
East West Bank acquired the property after the previous owners defaulted on a loan of approximately $42 million, according to The Real Deal. Brokers say lenders usually prefer to sell off distressed office buildings rather than operate them, and this listing is one more example of owners and banks testing the appetite for downtown San Francisco office space.
Market watchers expect a mixed crowd of potential buyers, ranging from investors seeking value-add office properties to developers who see a brighter future in residential units. Colliers is circulating an offering memorandum to prospective bidders while East West Bank waits to see who steps up. For now, the building stays vacant, with CoStar noting that the listing went live on Thursday. Whoever ends up with 1128 Market will have to balance the cost of revitalizing the property against the very public reminder of a shelved shelter plan and a lingering need for beds.
