Greg Flynn, CEO of Flynn Holdings, is making headlines with a significant $40 million investment in San Francisco’s struggling office market. Despite the city’s current challenges, Flynn’s confidence in a rebound is unwavering.

A Strategic Acquisition

In collaboration with Ellis Partners, Flynn Holdings has acquired 631 Howard St., a fully leased, 108,750 square foot office building in downtown San Francisco. This strategic purchase was made without the burden of a loan, allowing Flynn to hold the property as the market recovers. The building, a blend of historic architecture and modern finishes, requires minimal capital investment.

Market Challenges

San Francisco’s office market is facing unprecedented challenges. The vacancy rate has soared to 24%, the highest in the country, and office values have plummeted by over 50% from their pre-pandemic highs. Remote work policies and the shift towards flexible office arrangements have left many downtown buildings underutilized.

Flynn’s Optimism

Despite these hurdles, Flynn remains optimistic about the city’s long-term prospects. He views the current downturn as an ideal time to invest, citing San Francisco’s history of cyclical booms and busts as a sign of future recovery. “You can get everything right in investing in office, but if you get the timing wrong, it will likely derail the whole return,” Flynn told CoStar News. “Conversely, you can get many things wrong with an investment, but if you get the timing right, it’s the most important determinant of success.”

A Market in Crisis

The pandemic has hit San Francisco’s office market hard. Office attendance is still less than half of pre-pandemic levels, according to data from Kastle Systems. Numerous office buildings have been sold at deep discounts, and some owners have handed over properties to lenders through foreclosures or ownership transfers. Recent sales include 795 Folsomfor $48.3 million and 255 California St., both at steep discounts compared to pre-pandemic valuations.

Cautious Optimism

Flynn believes that San Francisco’s unique strengths will eventually drive a resurgence in demand for office space. “We’re prepared for it being a long haul just because of the amount of vacancies,” Flynn said. “But I’m a long-term investor, and San Francisco is going to come back in a big way for all of the right reasons.”

His enthusiasm is shared by other investors, both local and national, who see plenty of long-term potential in the city’s distressed office market.

---

Key Takeaways:

• Greg Flynn, CEO of Flynn Holdings, is betting $40 million on San Francisco’s office market recovery.
• The acquisition of 631 Howard St. was made without a loan, allowing for a long-term hold.
• Despite a 24% vacancy rate and office values dropping by over 50%, Flynn remains optimistic about the city’s future.
• San Francisco’s office market has been severely impacted by the pandemic, but Flynn sees this as an opportunity for strategic investment.

---

Flynn’s bold move is a testament to his belief in San Francisco’s resilience. As the city navigates its current challenges, investors like Flynn are positioning themselves for the eventual recovery, confident that San Francisco will once again thrive.