Tishman to Buy SF Tower, Seeks Financing

Tishman Speyer has agreed to buy the office building at 650 California Street in San Francisco and is shopping for $130 million of financing.

New York-based Tishman is acquiring the property from investment manager AEW Capital of Boston. Lenders said the loan-to-value ratio on the proposed mortgage would be about 60%, indicating that the purchase price is roughly $220 million.

Tishman is seeking a fixed-rate loan with a term of 7-10 years. Eastdil Secured, which is brokering the sale for AEW, is also advising Tishman on the loan. It is showing the assignment mainly to insurers and other portfolio lenders.

The 492,000-square-foot building, between Kearny Street and Grant Avenue, is regarded as one of San Francisco’s top-tier office properties. Its occupancy rate is 92%. Tenants include law firm Littler Mendelson (111,000 sf until 2016), Credit Suisse (62,000 sf until 2020) and advertising agency Goodby Silverstein (51,000 sf until 2017). Leases on 50% of the space roll over by 2016. That was pitched as a plus for potential bidders because rising demand for office space in the city should provide the opportunity to raise rents as leases expire.

AEW bought the 33-story building in 2007 from Arizona developer William S. Levine on behalf of a client that was believed to be a UBS affiliate. It acquired the building at the top of the market, paying around $300 million.

The Financial District property, previously known as the Hartford Building, was the tallest structure in California when Hartford Insurance developed it in 1964 as its West Coast headquarters.

Back Print