Key Takeaways
- • A joint venture between affiliates of 1754 Properties and Vander Capital Partners closed its acquisition of 40 Jessie Street, a 49,560-square-foot office building in downtown San Francisco that is 100% leased to Google.
- • The property sits one block from Salesforce Tower in South Financial District, the core of San Francisco's Class A office submarket, and has been leased to Google and its predecessor affiliate since 2016 under a lease running through December 2030.
- • The deal marks the first office acquisition for both 1754 Properties and Vander Capital Partners as partners, and is funded in part by capital from 1754's co-GP investment program.
- • Cushman & Wakefield reports San Francisco recorded 3.6 million square feet of office leasing in Q3 2026, with year-to-date leasing above 9.0 million square feet, already exceeding all of 2025.
- • Citywide vacancy fell 410 basis points year over year to its lowest level since 2023, with AI companies leasing more than 4.4 million square feet through the first three quarters of 2026.
Summary
A joint venture between affiliates of 1754 Properties and Vander Capital Partners has closed its acquisition of 40 Jessie Street, a 49,560-square-foot office building in downtown San Francisco, according to a Business Wire announcement. The building is 100% leased to Google, which has occupied the property through itself and a predecessor affiliate since 2016. The lease runs through December 2030, and the property combines conventional office space with purpose-built laboratory infrastructure. The sale price was not disclosed in the announcement.
The asset is located in the South Financial District, one block from Salesforce Tower and minutes from BART's Montgomery Street station. Neighboring occupiers within a few blocks include Anthropic, OpenAI, Databricks, Salesforce and Okta, reflecting the concentration of AI, technology and venture capital tenants in the submarket.
The acquisition comes amid a broad recovery in San Francisco's office market, driven by the AI and technology sectors. Citing Cushman & Wakefield's San Francisco Office MarketBeat Q3 2026 data, the announcement notes 3.6 million square feet of office leasing in the third quarter of 2026 and more than 9.0 million square feet year to date, already above the full-year 2025 total. AI companies alone leased more than 4.4 million square feet through the first three quarters of 2026, more than double their 2.1 million square feet for all of 2025. Citywide vacancy declined 410 basis points year over year to its lowest level since 2023.
Alexander Galewicz, managing partner of 1754 Properties, described the transaction as the firm's first office acquisition and said the firm looks forward to more. He credited access to family office capital for allowing a more reliable closing amid geopolitical volatility, inflation and rising interest rates. Joe Smith, CEO of 1754 Properties, said the firm was a co-sponsor alongside Vander Capital and is seeking additional sponsors in the office sector in top MSA locations that can benefit from 1754's GP capital, institutional limited partner equity, debt relationships and guarantee capacity.
1754 Properties, based in South Florida with offices in Mexico City and Phoenix, is an institutional owner, developer, lender and asset manager focused on hospitality assets, with additional commercial real estate holdings in office and multifamily. The firm has executed more than 50 institutional investments with partners including Fortune 500 pension plans, university endowments, private equity firms, family offices and a major Middle Eastern financial institution, typically targeting assets valued between $50 million and $500 million. Vander Capital Partners is described as a privately held real estate investment firm.
The asset is located in the South Financial District, one block from Salesforce Tower and minutes from BART's Montgomery Street station. Neighboring occupiers within a few blocks include Anthropic, OpenAI, Databricks, Salesforce and Okta, reflecting the concentration of AI, technology and venture capital tenants in the submarket.
The acquisition comes amid a broad recovery in San Francisco's office market, driven by the AI and technology sectors. Citing Cushman & Wakefield's San Francisco Office MarketBeat Q3 2026 data, the announcement notes 3.6 million square feet of office leasing in the third quarter of 2026 and more than 9.0 million square feet year to date, already above the full-year 2025 total. AI companies alone leased more than 4.4 million square feet through the first three quarters of 2026, more than double their 2.1 million square feet for all of 2025. Citywide vacancy declined 410 basis points year over year to its lowest level since 2023.
Alexander Galewicz, managing partner of 1754 Properties, described the transaction as the firm's first office acquisition and said the firm looks forward to more. He credited access to family office capital for allowing a more reliable closing amid geopolitical volatility, inflation and rising interest rates. Joe Smith, CEO of 1754 Properties, said the firm was a co-sponsor alongside Vander Capital and is seeking additional sponsors in the office sector in top MSA locations that can benefit from 1754's GP capital, institutional limited partner equity, debt relationships and guarantee capacity.
1754 Properties, based in South Florida with offices in Mexico City and Phoenix, is an institutional owner, developer, lender and asset manager focused on hospitality assets, with additional commercial real estate holdings in office and multifamily. The firm has executed more than 50 institutional investments with partners including Fortune 500 pension plans, university endowments, private equity firms, family offices and a major Middle Eastern financial institution, typically targeting assets valued between $50 million and $500 million. Vander Capital Partners is described as a privately held real estate investment firm.
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