Whatever drama has been ongoing at the Transamerica complex between its owner and developer/operator Michael Shvo may get wiped away with a reported deal to sell the tower.
Bloomberg was first to report the news Tuesday that the 54-year-old Transamerica building, arguably the most defining feature of San Francisco's skyline, is about to be sold for the second time in six years. Developer Michael Shvo, who may or may not have an ownership stake, and German pension fund Bayerische Versorgungskammer (BVK), the primary owner, have reportedly struck a deal to offload the 48-story tower to Cyprus-based investment firm Yoda plc.
The sale price has not been disclosed, and the deal has not closed.
Shvo, who has claimed ownership of the tower, and his investors purchased the Transamerica building in 2020 for a reported $650 million, marking the first time the tower had changed hands since its construction in 1972. They went on to buy the adjacent buildings at 505 Sansome and 545 Sansome, dubbing them Two Transamerica Plaza and Three Transamerica Plaza — and the ground floor of the latter is home to the new restaurants Cafe Sebastian and Ame.
Presumably they have sold off the three buildings together as a package deal.
The Chronicle reports on rumors that have been swirling in the local real estate world about a souring of the relationship between Shvo and BVK, who have partnered on other residential and hotel properties in other markets. And the Chronicle previously reported that BVK and its investment management firm Deutsche Finance Group had been in search of a new asset manager for its US real estate portfolio. This apparently has led to the sale of other properties that were being overseen by Shvo as well.
The pension fund, BVK, has reportedly invested a total of $1.9 billion in US real estate, and a site called European Pensions recently reported that the fund is facing around $1 billion in possible losses due to weaknesses in the sector.
The Transamerica building had appeared to be successful in leasing out its office space over the last several years, with Shvo regularly touting the numbers — he claimed the building was 80% leased in late 2022, a full two years before he held a public reopening to mark the completion of a $400 million renovation effort.
Most recently, Shvo publicized the fact that an unnamed tenant had just signed a lease for the most expensive office rate in the city to date, at $300 per square foot. The deal was for 4,000 square feet on the tower's 44th floor, or around $1.2 million per year. Tech-focused investment firm Coatue and Japanese bank Mizuho also had reportedly signed large leases on the building's upper floors.
But there was also an ongoing legal dispute, which Shvo's camp regularly shrugged off, between Shvo's company and upscale private club CORE, which had been publicized as an early marquee tenant in the tower with a planned 2023 opening that never happened. In November, that dispuate was still ongoing, with CORE accusing Shvo and BVK of racketeering and self-dealing.
The suit was seeking $250 million in compensatory damages, and it's unclear where that stands.
Photo by Joseph Barrientos
