1754 Properties Buys Google-Leased 40 Jessie Street in San Francisco

1754 Properties and Vander Capital Partners have acquired 40 Jessie Street, a 49,560-square-foot office building in downtown San Francisco that is fully leased to Google through December 2030. The deal marks the first office acquisition in 1754 Properties' history and the first office investment the two firms have completed jointly.

The building sits in San Francisco's South Financial District, roughly one block from Salesforce Tower and near the Montgomery Street BART station, which connects the property to the city's regional transit system. It combines conventional office space with specialized laboratory infrastructure. Google and a predecessor affiliate have occupied the property under a lease arrangement dating back to 2016.

Why office, and why now?

The buyers are leaning on hard market data to justify the move. According to Cushman & Wakefield figures cited by the purchasers, San Francisco recorded approximately 3.6 million square feet of office leasing in the third quarter of 2026 alone. New leasing during the first nine months of the year exceeded 9 million square feet — already surpassing the total recorded throughout all of 2025.

The AI sector is doing much of the lifting. Artificial intelligence companies accounted for more than 4.4 million square feet of leasing through the first three quarters of 2026. That compares with roughly 2.1 million square feet during all of 2025 — meaning AI tenants have more than doubled their full-year 2025 uptake in just nine months. Citywide office vacancy also fell by 410 basis points year-over-year, reaching its lowest level since 2023.

The buyers read these conditions as supportive of investment in properties occupied by established technology companies. The location reinforces that thesis: 40 Jessie Street sits near several major technology employers, including Anthropic, OpenAI, Databricks, Salesforce, and Okta. That concentration of employers and technology activity is, in the buyers' framing, an important element of the property's investment profile.

What does this change for 1754 Properties?

The firm isn't a traditional office player — yet. 1754 Properties is a real estate investment platform with a background in hospitality and commercial real estate, backed by family offices, private equity investors, and financial institutions. Its track record includes more than 50 institutional transactions involving partners such as pension plans, endowments, and international family offices. The firm typically targets assets valued between $50 million and $500 million.

This acquisition is a deployment from 1754's co-general partner investment program, which supplies capital and institutional resources to investment sponsors pursuing commercial real estate transactions. Those capabilities include access to equity capital, debt relationships, financial guarantees, and financial management resources.

CEO Joe Smith made clear the firm intends to use this deal as a template, not a one-off. "We are thrilled to have been a co-sponsor along with Vander Capital. We are seeking more sponsors in office sector in top MSA locations who would benefit from 1754's GP capital, access to institutional limited partner equity capital, deep debt relationships, substantial guarantee capacity and finance and accounting teams to help execute a transaction," Smith said.

Managing Partner Alexander Galewicz emphasized both the milestone and the firm's funding edge. "This marks 1754's first office acquisition, and we look forward to many more," Galewicz said. "1754 is fortunate to have access to significant family offices which allow a more reliable closing through choppy geopolitical situations, inflation, rising interest rates and other difficult situations."

Vander Capital Partners, a privately held real estate investment firm, participated in the transaction as a joint venture partner.

The so-what

The structure of the bet matters as much as the building. The partners get an established corporate tenant locked in through the end of 2030, which cushions downside risk while San Francisco's office recovery plays out. At the same time, they keep optionality to pursue additional office investment opportunities as the market tightens.

1754's leadership indicated the transaction is intended as a starting point for expanding its office investment activities in major metropolitan markets. With AI-driven demand pushing vacancy down to its lowest level since 2023 and a lease that runs into the next decade, the partnership gains exposure to San Francisco's recovering office market and the continued expansion of its AI and technology industries — on terms where the tenant, not the market, carries most of the near-term weight.