San Francisco Business Times
As Transamerica Pyramid turns 50, its new owner details how the $650M deal got done and his vision for its futureLaura Waxmann , Dec 06, 2022
Founder and Chairman of Shvo Michael Shvo poses for a photo near mockup designs of the redesigned Transamerica Pyramid area inside of Transamerica Pyramid before a ground breaking ceremoney in Downtown San Francisco on Tuesday, Dec. 6, 2022.
New York real estate mogul Michael Shvo had his eyes on San Francisco Transamerica Pyramid long before the iconic building was listed for sale for the ﬁrst time in its history in 2019. In fact, Shvo had been dreaming about it for decades. Shvo drew a sketch of the unique 853-foot oﬃce tower in the city’s Financial District after his ﬁrst family trip to San Francisco as a child in 1979, and at a swanky ceremony celebrating the pyramid’s 50th anniversary on Tuesday morning — which happens to coincide with his own 50th birthday later this month — Shvo revealed that he was never able to forget it.
“My parents tortured us by taking us around the world to see great architecture,” he said, adding that “seeing the Transamerica Pyramid was seeing the future.” “It totally changed me,” said Shvo.
Tuesday’s ceremony marked the start of what Shvo described as a year-long celebration of the skyscraper’s birthday, but also the oﬃcial groundbreaking of Shvo’s$400 million redevelopment plan for the building. His vision is to turn the prominent landmark into a world-class headquarters building and public gathering space that will draw San Franciscans and tourists alike into the city’s ailing downtown.
His plans for the pyramid are as ambitious as his dream of owning it once was: The renovations, designed by London-based architect Foster + Partners, will involve an entire city block and include extensive upgrades to the Transamerica Pyramid’s entrance and lobby and the addition of a list of amenities. The property — which includes two smaller buildings at 505 Sansome St. and at 545 Sansome St.— features a Redwood Park designed in 1969 by Thomas Gali that will be restored and expanded. Pointing to a property model set up in a second ﬂoor oﬃce inside of the pyramid that depicts what the entire complex will one day look like, Shvo’s ﬁnger traced a path from the street through the park, landing on a public plaza at the center of the property that will feature restaurants, including an ice cream shop. “The idea is that this ground plane of the pyramid is going to be an attraction for the people of San Francisco,” Shvo said. “I want people to come to the pyramid, to the park, and not just take a picture from a mile away.” This vision resonated with those steering the city into a new chapter. “This project gives me goosebumps,” said Mayor London Breed. “This is not just about this iconic building that is photographed and seen all over the world — this is about creating an open community space and place where people can congregate, where folks can dine and enjoy this particular neighborhood in San Francisco.”
The Transamerica Redwood Park today
A rendering of Transamerica Redwood Park after renovation work
The lobby of Transamerica Pyramid today
A rendering of the lobby of Transamerica Pyramid after renovation work
The 48th floor of Transamerica Pyramid today
A rendering of the 48th floor of the Transamerica Pyramid following renovation work to convert it to a private bar and lounge for tenants
A photo of Mark Twain Plaza at the Transamerica Pyramid as it exists today
A rendering of Mark Twain Plaza after renovation work
His team will convert the top ﬂoor of the Pyramid from oﬃce space to a private bar and lounge for exclusive use by the building’s tenants and will curate amenity ﬂoors to feature ﬁtness and gallery space in the building. Three ﬂoors in the building have already been leased to the luxury members-only club Core. The pyramid was 90% leased in 2019. Shvo told me on Tuesday that he sealed deals with several new oﬃce tenants in recent months. Though he would not give details, Shvo said that the spaces were leased at rates that are “double than what they were pre-pandemic.” Shvo’s $650 million acquisition of the pyramid — which was completed months after the pandemic chilled the city’s once incredibly hot oﬃce market — made headlines at a time of mounting uncertainty about the future of the city. Just over two years later, Shvo spoke publicly for the ﬁrst time about how the high-proﬁle deal was closed. “It was October 2019 — we are in Beverly Hills and just completed the Mandarin Oriental Residences there — and I get a call that Transamerica Pyramid is coming to the market. I was given the name of the broker. It was Friday and I called him and told him: we are coming on Sunday to see the building,” he said. “He said no. I ﬁgured he didn’t want to get out of bed to show me the building. I said, ‘We are coming anyway.” Shvo said that he remembers staring up at the pyramid from Montgomery Street and telling his team, “We have to buy this building. We can leave now.” What followed were ﬁve months of phone calls, interviews and six rounds of bidding that Shvo described as a “nail bite.”
San Francisco Mayor London Breed, Senator Scott Weiner, Founder and Chairman of Shvo Michael Shvo, Former San Francisco Mayor Willie Brown, and Board of Supervisors member Aaron Peskin chat before the ground breaking ceremony at Transamerica Pyramid in Downtown San Francisco on… more
In the end, four bidders remained. Shvo said that he was approached by two of them with requests to join forces. He turned them both down. A week before providing the ﬁnal bid, Shvo recounted a strange omen that he described as a “little miracle.” He received a call from investment partner Jason Lucas, managing partner of Deutsche Finance America, who was in Denver at the time. “He said, ‘I found something,'” said Shvo, adding that Lucas sent him a photo of himself holding a golf ball engraved with the word “Transamerica.” “At that point I knew that God is with us, the building is ours, and that’s the way it was.” A week later, in February 2020, Shvo was selected to become the pyramid’s second owner. But the celebrations did not last long— a month later, Covid-19 hit. “Our lender decided that they didn’t want to lend us money on this building any more because of Covid,” said Shvo. “Everybody said no one is ever coming back to an oﬃce. We thought the world is coming to an end. But we didn’t quit. I knew this building is bigger than anything else. Finally, in October of 2020, we ended up closing on this building.” Shvo said that he is a believer in the “magic and resilience” of San Francisco. While he bought the building, he said he views it as belonging to the people of the city. “We are just the custodians. I feel a deep responsibility developing and owning it and we hope that in the next 50 years that it will be as great as it is today.”