San Francisco’s fourth-tallest building, 555 California St., could be sold in potentially one of the largest transactions in city history.
Vornado Realty Trust, which owns 70% of the property, said it is exploring the “recapitalization” of the tower. In the real estate industry, that term typically suggests a partial ownership sale. The former headquarters of Bank of America has been a fixture in the city skyline for over five decades. The Trump Organization, the family business of President Trump, owns 30% of the tower.
Vornado is also considering the sale of 1290 Avenue of the Americas in New York, an office tower in which Trump also has a 30% stake.
The 1.8 million-square-foot California Street tower is one of the largest and most valuable properties in the Bay Area, with a city-assessed value over $1 billion.
However, the coronavirus pandemic has halted most commercial real estate sales activity and it’s uncertain if office demand will rebound with many office workers remaining at home. The over $700 million sale of the Transamerica Pyramid has yet to close, according to city property records.
Vornado said a transaction is not guaranteed, and a spokesman declined to comment further. Bloomberg first reported the news and said the Trump Organization may also sell its 30% stake.
Tenants at 555 California St. include Microsoft, Goldman Sachs and private equity firm KKR. Vornado said the building is 99.8% leased, with a small 6,000-square-foot office leasing this year with annual rent of $117 per square foot, among the highest in the country.
Steve Roth, CEO of Vornado, criticized both New York and San Francisco’s liberal political leaders in a May earnings call, but said both cities have strong economies.
“The best real estate city in the country right now is San Francisco,” said Roth, who has also advised President Trump. “In each point San Francisco is worse than New York. It’s further left-leaning, homeless situation is worse, etc. So the political situation is important, but it’s not definitive.”
Separately, Vornado sued the co-working company Regus for terminating a lease at 345 Montgomery St., a retail building that is part of the 555 California St. complex. Regus had planned to convert the former bank branch into shared office space, but scrapped the lease after the city ruled Regus couldn’t install an exterior sign, though the city later reversed itself.
Roland Li is a San Francisco Chronicle staff writer. Email: roland.li@sfchronicle.com Twitter @rolandlisf
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SF’s 555 California, partly owned by Trump, could be sold - San Francisco Chronicle
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