An investor who plans to spend millions buying up San Francisco real estate at bargain prices is in the process of purchasing his second building in Union Square, according to two sources familiar with the deal.
An entity affiliated with Ian Jacobs, an heir to the Reichmann real estate dynasty, plans to buy 111 Ellis St., an office building at the corner of Powell Street that previously housed Blondie’s Pizza. One source said the deal is in escrow. The purchase price is unknown, though one source described it as a significant haircut from the building’s pre-pandemic value.
Jacobs’ team declined to comment.
This would mark the second Union Square property Jacobs has purchased this year. In May, he bought the green Art Deco retail building at 200-216 Powell St. for $7.4 million, according to the SF Business Times.
Details of Jacob’s plan, which he dubbed Project Uris, emerged last spring, when The Wall Street Journal revealed that he was raising money to buy up to 3 million square feet of property in downtown SF. The effort gets its name from his family history: The Reichmanns bought several discounted New York City office buildings from a firm called Uris in the late 1970s; the buildings eventually exploded in value as the city recovered from an economic slump.
Jacobs spent part of his career at investment firm Berkshire Hathaway as a protégé of Warren Buffett, who built much of his vast fortune buying during market dips.
The latest purchase comes as Union Square has been desperately trying to shed its pandemic-era reputation of vacancies and safety concerns. Powell Street, many tourists’ first introduction to the city as they queue for a cable car ride, has been pockmarked with ground-floor vacancies for several years.
The area’s boosters cite recent openings such as Shoe Palace in February and a Nintendo store in May, which has lines on weekends, as signs of a nascent turnaround. Zara is slated to open, as are luxury menswear shop John Varvatos and photography store Camera West. Meanwhile, though, the five-story Saks closed in early May, and Macy’s impending exit hangs over the square.
Daniel Lurie, in an interview with Project Uris adviser Max Raskin last spring, before his election as mayor, said he was “excited” about Jacobs’ project, predicting that San Francisco would be “coming all the way back.”
Correction: A prior version of this story misstated the former tenant of 111 Ellis St.