1936 landmark at 417 Montgomery St. sold for $25 million, about half its assessed value, as AI firms drive a slow market recovery
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Overview
Updated 1 hour agoA historic Financial District office building at 417 Montgomery St., built in 1936, sold for roughly $25 million at the end of August. That is 17% below its 2006 sale price of $30 million and less than half its assessed market value of about $54 million.
The buyers, Kenson Ventures and Wheatley Properties, plan a six-month renovation and hope to fill the mostly vacant building with tech, architecture, and AI tenants. Their bet is that San Francisco's office market, hit hard by pandemic lockdowns and remote work, is finally turning around.
Why it matters
The sale shows how far San Francisco office values have fallen, and whether AI-powered demand can fill vacant space in the city's core.
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People Involved
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Peninsula-based investor that partnered with Wheatley Properties on the purchase, its largest investment in San Francisco to date.
Partner in the acquisition, focused on renovating the building to attract tech and creative tenants.
Timeline
January 1936 September 2026
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Sale reported by SF Standard
Latest NewsHistoric downtown office building sold at a big discount; new owners plan renovation for AI tenants.
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417 Montgomery St. sells for $25 million
TransactionKenson Ventures and Wheatley Properties close on the building, paying 54% below assessed value.
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Pandemic hits San Francisco office market
Market ShiftRemote work and lockdowns push vacancy rates above 30%.
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Building sold for $30 million
TransactionPrevious sale price before the pandemic-era downturn.
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417 Montgomery St. completed
MilestoneThe Lurie Building opens as the first major office project after the Great Depression.
Historical Context
2 moments from history that rhyme with this story — and how they unfolded.
Great Depression Recovery (1930s)
After the 1929 stock market crash and ensuing depression, San Francisco office construction ground to a halt. The Lurie Building at 417 Montgomery broke ground in 1935 as one of the first major private projects to restart.
Construction provided jobs and signaled renewed confidence in the city's commercial core.
The building became a fixture in the Financial District, housing tenants for decades.
This building survived the worst economic downturn in memory; the current sale echoes that resilience as the city emerges from pandemic-era remote work.
2008 Financial Crisis Office Sales
After the 2008 crash, distressed office buildings across the U.S. sold at 30-50% discounts from peak valuations. In San Francisco, many properties changed hands at steep cuts, but the market recovered within three years.
Bargain-priced buildings produced high returns for investors who bought during the downturn.
San Francisco's tech boom eventually pushed vacancy rates to record lows by 2015.
The current sale at 54% below assessed value mirrors the post-2008 pattern, and suggests a similar rebound could be underway.
