In a surprising move that underscores the bargain-bin discounts in the city’s real estate market, Empire, a record label founded in San Francisco, has purchased One Montgomery, a long-vacant historic building in the Financial District.
Real estate sources confirmed the deal for the nearly 100,000-square-foot property, which closed this week, and tagged the sale price at around $250 per foot, or in the low $20 million range. That’s a more than 60% haircut from the last time the building was sold, in 2019.
The seller was Texas-based Affinius Capital, a real estate investment firm that has owned the property since 2022. The news was first reported by the San Francisco Business Times.
Empire was founded in 2010 by Ghazi Shami, a Bay Area native who grew up listening to West Coast rap pioneers. The label has worked with award-winning artists, including Anderson .Paak, Shaboozey, and Migos. In 2022, Empire purchased fellow San Francisco label Dirtybird Records.
In many ways, One Montgomery represented the peak, nadir, and gradual recovery of San Francisco’s recent commercial real estate cycle.
The building was sold to San Francisco-based Redco Development and its Boston-based partner AEW Capital Management for $82 million in 2019, a 70% premium from the price paid by the previous owner, 601W Cos. of New York.
At the time, vacancy rates were in the single digits, and rents were at record highs. The partners planned to renovate the property to meet demand from creative startup tenants.
But the pandemic put those ideas — as well as downtown San Francisco’s larger office market — on ice. Seeing no path forward, Redco and AEW walked away from their investment and returned the keys to their lender, a predecessor company to Affinius. Ownership passed to the Crocker National Bank, which developed the nearby One Montgomery Tower and the adjacent Crocker Galleria.
One Montgomery was built in 1908 as First National Bank’s headquarters. Its Italianate columns, marble elements, and lion statues are ornate monuments to the rebuilding of San Francisco after the 1906 earthquake and fire.
For decades, the space served as a Wells Fargo branch, which shuttered in 2019, leaving the property without an anchor tenant.