MetLife, Norges Tap Pru for SF Office Loan
Prudential Mortgage Capital has won the financing assignment on the office building at 425 Market Street in San Francisco.
The MetLife joint venture that owns the 945,000-square-foot tower began seeking a fixed-rate loan with a term of 10 or 12 years a few months ago. It asked lenders to provide quotes at two amounts: $240 million and $320 million. Pru’s loan is believed to be at or near the low end of that range. Eastdil Secured is advising MetLife and its partner, Norges Bank Investment of Norway.
The Financial District property’s value is estimated at around $800 million. That would put the loan’s leverage ratio as low as 30% — an extremely conservative level.
MetLife was in the investor group that developed the 38-story building in 1973. The property was subsequently divided into two office condominiums, with Walton Street Capital owning about two-thirds of the space and MetLife controlling the rest. MetLife purchased Chicago-based Walton Street’s condo in 2006 for $260 million. In 2014, MetLife sold a 47.5% stake in the property to Norges.
The building is nearly fully leased. Tenants include Morrison & Foerster (220,000 sf), United Behavioral Health (79,000 sf), AON (53,000 sf), IBM (53,000 sf) and Xoom (53,000 sf), according to CoStar.
MetLife and Norges jointly own four other properties — two in Boston and two in Washington. The Boston properties are the 1.3 million-sf One Financial Center and the 1 million-sf One Beacon Street. The Washington properties are the 842,000-sf Constitution Square 3&4 and the 782,000-sf building at 555 12th Street NW.