Prebys Foundation purchases Wells Fargo Plaza tower to enhance downtown San Diego.

A San Diego-based private foundation, the Prebys Foundation, has made a significant move to support the city’s struggling downtown real estate sector with a recent acquisition. The foundation, which has assets surpassing billion, purchased the 24-story office building known as Wells Fargo Plaza, located at 401 B Street, for million in an all-cash transaction from the Irvine Company.

The Wells Fargo Plaza, which encompasses 488,000 square feet, was acquired by the Irvine Company in 2004 for 8.3 million. At the time of the recent sale, the building was approximately 75% leased, leaving 252,661 square feet available, including sublease opportunities, according to real estate database CoStar. This transaction marks a pioneering real estate investment for the Prebys Foundation, which is traditionally known for its philanthropic efforts.

The foundation’s CEO highlighted that the purchase was not only a financial transaction but also part of a larger commitment to revitalizing downtown San Diego’s central business district. The foundation intends to implement improvements to the property aimed at increasing occupancy and enhancing the B Street corridor, which has faced declining office occupancy rates and increased foreclosures in recent years.

In 2023, the Prebys Foundation reported holding assets of .13 billion and distributing .7 million in grants and charitable gifts. Established in 2016 following the death of local developer Conrad Prebys, the foundation has evolved its investment strategies, recently broadening its scope to include private equity initiatives. Earlier this year, it launched the Prebys Ventures Impact Fund with million dedicated to supporting early-stage technology and life science startups in the region.

Wells Fargo Plaza, completed in 1985, has undergone significant renovations afforded by the Irvine Company, including upgrades to conference facilities and outdoor workspaces. Current tenants include notable firms like Wells Fargo Bank and consulting companies such as WSP and Kimley-Horn.

The recent acquisition also aligns with the foundation’s plans for broader engagement in downtown San Diego. Last year, the foundation sought strategic guidance to reimagine the Civic Center blocks, a project ongoing despite shifting city budget priorities. While there are possibilities for the Wells Fargo Plaza to serve different purposes in future city plans, foundation leaders have clarified that any tenant arrangements are yet to be discussed.

This transaction, valued at approximately per square foot, sets a new market standard for the B Street corridor, which has seen office vacancy rates in downtown San Diego surge to 34.9%—double the figure from late 2019. The decline stems from pandemic-related disruptions and changes in workplace preferences, with many businesses downscaling their office spaces or relocating to properties that offer attractive amenities.

Notably, the Irvine Company is pivoting its focus toward development initiatives in areas like University City, where there is potential for over 30,000 additional residential units. They continue to reduce their downtown holdings, as evidenced by the recent sale of several office properties for significantly less than their original purchase prices. Despite these changes, the Irvine Company remains the largest office landlord in San Diego, with a thriving portfolio that spans several key areas, including University City and Mission Valley.

As the Prebys Foundation takes this bold step into real estate investment, it aims not only to achieve financial sustainability but also to contribute to the revitalization of downtown San Diego, a move that could shape the future landscape of the city’s central business district.