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edco Development and Bridges Capital have acquired the historic 12-story Kohl Building in San Francisco's Financial District for $25.75 million. The building, located at 400 Montgomery Street, spans 85,600 square feet and was previously owned by Intercontinental Real Estate and Harvest Properties, who purchased it in 2019 for $77.5 million.

    The deal works out to $301 per square foot, significantly lower than the estimated $350 per square foot when the building was marketed in April. Redco has a history of making low-ball offers on commercial properties in San Francisco, which have seen a decline since the pandemic shift to remote work led to increased office vacancy rates.

    The Kohl Building, built in 1901 and renovated in 2018, survived the 1906 San Francisco earthquake. Redco plans to move its lobby south toward California Street and lease the fifth and ninth floors as furnished office suites, filling a niche in the market for "half-floor, high-identity" spaces.

    The firm has already signed letters of intent for 16,000 square feet in lease deals, which should bring the building's occupancy to 65 percent. Redco's managing partner, Chris Freise, stated that the company is actively seeking new deals and plans to continue writing offers on San Francisco office properties.