Locally based investors in San Francisco buying and building properties in the commercial real estate market are competing with Texans for a foothold in the city.
Texas-based investors represent an increasing number of out-of-state buyers for San Francisco commercial spaces, the San Francisco Standard reported. This coincides with an influx of tech workers and artificial intelligence companies moving into San Francisco, helping thaw the previously frozen commercial market.
The Union Square area in particular has seen an uptick in activity from Texas-based buyers.
Dallas-based investor Douglas MacMahon bought the One Union Square building in August and then the five-floor retail building at 240 Post Street in November. MacMahon has bought more than a dozen properties in the city since August 2024, including the former Burberry building at 225 Post Street and a portfolio of 11 retail properties across five buildings concentrated in Hayes Valley.
MacMahon, a former San Francisco resident, sees the potential as the market hums back to life.
“My partners and I are long-term investors, and we believe San Francisco in the long-term is a great market for investing in real estate,” he told The Real Deal last year.
Another Dallas-based investor, Lone Star Funds, is poised to buy the 360,000-square-foot building at 600 California Street in the Financial District. That building previously belonged to WeWork before falling into default and being placed into receivership in 2023.
Houston-based investment and development giant Hines bought an 87-unit apartment building in the Duboce Triangle last year. It’s also looking to sink more money into the city, submitting a proposal to build a 76-story office tower downtown that would become San Francisco’s tallest office building, the San Francisco Standard reported.
Charles Schwab is looking to lease office space in San Francisco despite moving its headquarters from the city to Westlake, Texas in 2021.
— Chris Malone Méndez
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