San Francisco’s commercial real estate market has seen a notable recovery in recent months, with renewed trading activity across offices, hotels, and commercial buildings after a prolonged period of stagnation.
Interestingly, buyers now include both local investors and out-of-state players. Among them, Texans have emerged as a particularly prominent group, playing an unexpected role in this real estate momentum.
Texas has benefited from substantial financial support that enabled a significant transformation after several major companies relocated there from the San Francisco Bay Area during the early stages of the COVID-19 pandemic, including Charles Schwab, Chevron, and Oracle.
For years, local investors were almost the only ones interested in vacant buildings in San Francisco. However, experts view the growing interest from out-of-region investors as a positive development, driven in part by the boom in artificial intelligence and rising population levels.
One of the areas experiencing notable activity is Union Square, where Texas-based investors have injected significant capital. For example, an investment group led by Douglas McMahon completed the purchase of two buildings in recent months—one being the One Union Square building in August, and the other a five-story commercial property on Post Street.
McMahon has finalized several acquisition deals in San Francisco since 2024, including some well-known commercial properties in Union Square, reflecting his strong confidence in the downtown market. Although he has declined to comment recently, he has previously emphasized his deep understanding of the market, stemming from his former residence in the city.
As part of this growing interest, Dallas-based Lone Star Funds has emerged as a potential buyer of a large 360,000-square-foot building on California Street that was previously owned by WeWork. Meanwhile, Houston-based Hines has acquired an 87-unit residential building in Duboce last year and recently submitted plans to develop a massive 76-story tower in the city center.
Even Charles Schwab, which moved its headquarters to Texas in 2021, is now seeking new office space in San Francisco, highlighting a shift in sentiment toward the city’s real estate market.
Derek Daniels of Colliers underscores the importance of the city’s “rapid recovery” narrative in attracting interest from outside investors. He also praised Mayor Daniel Lurie’s role in reinforcing this improvement and supporting the restoration of confidence among economic stakeholders.
Commenting on the current situation, Daniels described this momentum as a positive indicator of broader economic improvement rather than a short-lived trend. Similarly, Kelly Glass of Avison Young noted rising enthusiasm among potential commercial investors regarding office leasing in downtown San Francisco, adding that she has observed renewed interest in the area alongside encouraging growth in demand.
