Buy of San Francisco Dealership a Uncommon Vibrant Spot in Metropolis’s Troubled Gross sales Market
An uncertain economic outlook has brought San Francisco’s real estate investment market to a near halt, but the sale of a luxury car dealership has been a source of much-needed optimism as the city begins to recover.
IndiGo Auto Group, a Houston-based network of high-end car brands, bought the former Mercedes-Benz showroom 500 Eighth Street in San Francisco for $60.2 million, marking one of the largest deals closed in the past year and earning it a 2023 CoStar Impact Award, as judged by real estate professionals familiar with the market.
The property, which was built in 2006 and is ready to move into, will soon be reopened as a Porsche dealership.
San Francisco’s retail market — particularly outside of its main Union Square shopping district — has long faced challenges that were exacerbated by the outbreak of the pandemic in 2020. The city’s bureaucracy and rising and high crime rate have turned investors away – high-profile tenants like Gap Inc. and Walgreens have closed more locations than opened.
Defying poor investor sentiment, the purchase of IndiGo meant an otherwise vacant retail lot would reopen as a new luxury auto dealership to revitalize the San Francisco street corner.
About the project: The nearly 91,200-square-foot building previously housed a Mercedes-Benz dealership until the location closed in mid-2021 and the luxury car brand moved to a new location in South San Francisco. The space is located in the Showplace Square neighborhood, which is home to numerous tech offices, including Airbnb, Asana, Zynga, Stripe, and Volta.
What the judges said: “The sale of the Mercedes-Benz dealership to another auto dealership is a positive development and will help preserve jobs and economic activity in San Francisco at a time when the local economy is struggling to bounce back to recover from the effects of the pandemic,” said CoStar Impact Award judge Mary Alam, also executive vice president at NAI Northern California. “Had Mercedes-Benz moved out and left the building empty, it would have been a disgrace to the region and would have also led to a decline in employment, economic activity and growth.”
You made it possible: Zach Haupert, Michael Sanberg and Trevor Gudim from Touchstone Commercial Partners represented the seller Rialto Capital Management in the transaction. Jeff Badstubner with JLL brokered it on behalf of the IndiGo Auto Group.