San Francisco Chronicle owner Hearst Corp. is purchasing a downtown office tower and plans to relocate the staff of the 160-year-old newspaper to the new property.
Hearst is in contract to buy 450 Sansome St. and aims to close the deal next month, according to Marty Cepkauskas, senior director of real estate for the company. He declined to disclose the sale price.
The temporary relocation of the Chronicle, as well as Hearst-owned SFGate, to the Financial District building near Jackson Square, is intended to accelerate a $1 billion mixed-use development known as 5M at the corner of 5th and Natoma, first pitched as a partnership between Hearst and Forest City Realty Trust.
The building at 450 Sansome is “in a desirable neighborhood, fits our needs from an investment perspective, and provides the flexibility to jumpstart the 5M residential component,” Cepkauskas said.
Hearst and Ohio-based Forest City first pitched 5M in 2008. The project was eventually inherited by Brookfield Properties, which managed the development of a 302-unit residential tower at 434 Minna and the largely vacant 25-story office tower at 415 Natoma and Mary Court Park.
The final component of the project, which will feature a 400-unit condo tower, is controlled by Hearst and includes the partial demolition of the Examiner building at 110 Fifth St. Plans were paused in 2023 amid a real estate slowdown, but Cepkauskas said talks resumed last year as City Hall looked to restart stalled projects.
The Chronicle’s current complex at Fifth and Mission Streets comprises two buildings connected by a sky bridge over Minna Street. The main newsroom is at 901 Mission St. and an adjacent property at 110 Fifth St. known as the Examiner building.
The Examiner building was built during a three-decade joint operating agreement between the Chronicle and the Examiner that started in the 1960s. More recently, tenants included Yahoo and BuildingConnected, but those leases ended in 2023.
Because of the combined electrical and HVAC systems between the two properties, demolishing one building requires the relocation of everyone in the Chronicle complex, Cepkauskas explained.
The Chronicle complex is 70% vacant, he added, providing an opportunity to take down the Examiner building and prepare for redevelopment, which could include teaming up with a developer partner.
The 135,000-square-foot building at 450 Sansome St. was last sold in 2015 for $89 million, according to property records.
“Hearst’s history goes back to the 1850s, and we believe San Francisco remains a vital market for innovation and commerce,” said Stephen T. Hearst, vice president and general manager of the Western Properties real estate division. “This acquisition reflects our belief in the city’s long-term resilience and appeal as a destination for world-class businesses.”