Photo: Wikipedia
The Transamerica Pyramid, San Francisco’s most iconic building, could soon have a new owner.
The building’s current owner, Transamerica Corp. and its parent company, Aegon, had sought an investor to take a partial stake in the building for nearly two years, but is now open to a full sale.
“We are exploring options for a possible 100 percent interest sale of the property, with Transamerica retaining naming and branding rights,” said Jay Orlandi, Transamerica’s chief administrative officer. “Right now, San Francisco has a very strong office real estate market. As well, we are seeking a reduction of exposure to our office portfolio, and greater diversity in our portfolio.”
In addition to the 853-foot Transamerica Pyramid at 600 Montgomery St., the offering will include adjacent buildings at 505 Sansome St. and 545 Sansome St. Together, the three structures comprise about 760,000 square feet.
The deal could reap roughly $600 million to $625 million, or north of $800 per square foot, according to sources familiar with the offering. Brokerage firm JLL is expected to bring the listing to the market next month. The properties were previously marketed by HFF before it was acquired by JLL earlier this year. JLL declined to comment.
The 523,000-square-foot Transamerica Pyramid, which has never been sold, has an assessed value of $252 million — a fraction of its market value. The building is about 90 percent occupied, according to CoStar Group, a real estate information company.
The 48-story pyramid, completed in 1972, was controversial when it was proposed for its unusual shape and design. It held the title of San Francisco’s tallest building until the completion of the 1,070-foot Salesforce Tower in 2018.
The nearby, 19-story building at 505 Sansome, completed in 1981, consists of 176,241 square feet. The building at 545 Sansome was built in 1930 and includes 56,940 square feet on nine stories. The three buildings flank a courtyard that features redwood trees, fountains, benches and a community stage.
Transamerica, the insurance company that commissioned the building, no longer occupies space in the building after moving operations to Baltimore. Aegon, a global insurance behemoth, bought Transamerica in 1999.
In January of 2018, Transamerica planned to retain control and majority ownership of the building, company spokesperson Julie Quinlan told the Business Times, “continuing our proud association with this iconic building.”
The sale would land among the highest-priced office building deals in 2019 during what has turned out to be a busy year for sales.
Last month, Atlanta-based real estate investor Jamestown LP paid $825 million for about $859 per square foot for the 930,000-square-foot Levi's Plaza campus at 1155 Battery St.
A much smaller historic building at 400 Montgomery St. sold this week for more than $900 per square foot — one of several FiDi office buildings that have traded hands recently.
Meanwhile, coworking operator WeWork is in contract to buy 600 California St.for more than $300 million, according to sources familiar with the deal.
By Blanca Torres and Fiona Kelliher – San Francisco Business Times