The former Union Bank building in the heart of San Francisco’s financial district, located at 350 California Street, was auctioned off last week. The winning bid was $65 million, roughly 75 percent less on a per-square-foot basis than comparable building sales from just before the pandemic. This is devastating news for San Francisco, because it provides a new market-rate benchmark for pricing other downtown commercial building listings, and such a low price indicates that investors have an extremely negative outlook for the future of San Francisco’s downtown area.

Just four years ago, you would be hard-pressed to find a major tech firm that either didn’t have a presence in San Francisco or wasn’t trying to create such a presence. Today, tech and other firms are abandoning the city. San Francisco’s downtown vacancy rate has increased from only about 4 percent in 2019 to nearly 30 percent today.

The glut of downtown office space, combined with San Francisco’s high housing costs, has led many to envision converting downtown commercial spaces into residential buildings, but not one residential development firm bid on this property. One residential development group that considered a bid was Emeral