Can a remade Transamerica Pyramid save San Francisco’s downtown? Michael Shvo thinks so

Michael Shvo, founder of Shvo and owner of the Transamerica Pyramid, poses for a photo inside the newly renovated lobby at the Transamerica Pyramid in San Francisco, Calif. on December 14, 2023. ADAM PARDEE

As Michael Shvo sees it, the Transamerica Pyramid is the only San Francisco landmark that the city’s residents and visitors are content to view from afar.

He thinks that’ll soon change.

Shvo’s eponymous New York investment and development firm is nearing the finish line on the first phase of a planned $400 million renovation to the 48-story Pyramid and two adjacent office buildings at 505 and 545 Sansome. Work on the 523,000-square-foot Pyramid’s lobby, which now boasts high ceilings, newly exposed architectural features, a public-facing cafe and new retail space, finished in mid-December.

Michael Shvo, founder of Shvo and owner of the Transamerica Pyramid, poses for a photo inside the newly renovated lobby at the Transamerica Pyramid in San Francisco, Calif. on December 14, 2023.

The lobby is expected to open early next year. The half-acre Transamerica Redwood Park at the center of the three buildings will follow — reopening first to tenants and then to the public — as will a bookstore and florist in the Pyramid’s lobby. The construction fencing that has for the last nine months framed the property, which spans an entire city block, will come down.

When it does, the Transamerica Pyramid will be reborn as a place to visit, Shvo says, rather than a skyline feature to be photographed from miles away.

“We definitely want to make this a destination,” said Shvo, who bought the property, dubbed the Transamerica Center, with his German partners for $650 million in 2020. “That is how you bring life to this city, both for San Franciscans and visitors.”

Big money, big plans

The firm’s total $1.05 billion investment in the Transamerica Center is indeed the most significant made in downtown San Francisco since the onset of the pandemic nearly four years ago. Though the second phase of the firm’s renovation plans — a roughly 50,000-square-foot addition to the nine-story, 57,000-square-foot 545 Sansome St. and a reimagining of Mark Twain Alley, which connects the redwood grove to Sansome Street — won’t be finished for several years, Shvo says it has reason to believe the ripple effects of its work go beyond the office market.

A new economic study released by Shvo in mid-December suggests the redwood grove and adjoining spaces could eventually draw some 3 million visitors annually. That is roughly the traffic that North Beach’s Washington Square, a beloved three-acre stretch of greenery along Columbus Avenue, saw in 2019.

The plans will usher in a new era not just for the Transamerica Center, Shvo says, but also for San Francisco’s downtown. The firm believed even prior to Covid that its investment would kick off a revitalization of the neighborhoods surrounding the three buildings. That’s perhaps an even more prudent goal today, as San Francisco’s Financial District continues to struggle with its postpandemic identity.

By mid-2024, visitors will be able to meander in and out of the pyramid’s lobby up to the ground-floor businesses — including an ice cream store, restaurants and a souvenir shop — that will frame the reimagined redwood grove and Mark Twain Alley. Shvo has also explored the idea of a publicly accessible observation deck, though there are no formal plans to move forward with one at this time, according to a source familiar with the developer’s plans who was not authorized to speak about them publicly.

Inside the new bookstore section of the lobby at the Transamerica Pyramid in San Francisco, Calif. on December 14, 2023. ADAM PARDEE

The developer cinched city approval for the second phase of renovations Dec. 14; it expects to finish construction in 2026. City planning staff wrote that the improvements to Mark Twain Alley, where Shvo wants to create a new open space, would deliver one of the only ground-level public open spaces in downtown San Francisco with “extensive greenery.”\

Landmark office buildings like the Transamerica Pyramid often appeal to tenants in sectors like law, private equity and venture capital, said Alexander Quinn, senior director of research for Northern California at real estate services firm JLL — that is, tenants who tend to seek out “higher-profile space” and are willing to pay up for it. JLL’s Chris Roeder, Carlye Parker and Matt Shewey are handling leasing in the building.

Shvo said in mid-December it has done “multiple” lease deals over $200 per square foot — some as high as $275 per square foot — and expects that its next deal will come in around $300 per square foot. Based on top rents achieved, those rates make the building the second-most expensive in the country, per data from JLL, behind only Manhattan’s 425 Park Ave. “Trophy” rents in San Francisco typically clock in anywhere from $100 to $125 per square foot.

“Transamerica definitely has its own cachet, and as that gets reenvisioned, we imagine it’ll only build on that as a landmark building,” Quinn said. Among the other San Francisco office properties that fall into the same exclusive category: Salesforce Tower, One Market, Four Embarcadero Center, and 555 California St.

“They’re iconic enough where you could say, ‘I’m at this building,’ and most people would know what you were talking about,” Quinn said, adding many of those properties also offer high-touch services like fitness space, valet parking and other tenant-exclusive amenities. Shvo, for one, plans a tenants-only bar on the Pyramid’s top floor.

Transamerica Pyramid TODD JOHNSON | SAN FRANCISCO BUSINESS TIMES

The firm’s vision for Transamerica is somewhat reminiscent of Manhattan’s Empire State Building — another office property that has become a symbol of its city and a bustling tourist destination. Shvo says he takes no offense to the categorization: Tourists, he said, flock to see and experience things that they can’t find in other places.

“I think that’s what we set out to do. You can’t get this anywhere else, even not in New York,” Shvo said, looking out over the redwood grove. He hesitated. “I mean, you have Central Park. But I don’t own Central Park.”

Correction/Clarification

An earlier version of this article misstated the timeline for construction at 545 Sansome. It is due to be completed by 2026.