parallax-partners-2

SF’s Transamerica Pyramid to sell for over $700 million

Roland Li and J.K. Dineen Feb. 5, 2020

The Transamerica Pyramid has reportedly been sold for the first time since it was built in 1972. Photo: Liz Hafalia / The Chronicle

San Francisco’s Transamerica Pyramid, an internationally recognized symbol of the city, will be sold to New York developer Michael Shvo, according to seller Transamerica Corp.

Shvo and German partners BVK and Deutsche Finance agreed to pay $711
million for the 853-foot tower at 600 Montgomery St., currently San Francisco’s second-tallest, along with two smaller buildings at 505 and 545 Sansome St. The three buildings total around 750,000 square feet.

This will be the first time the 1972 tower has been sold. Transamerica Corp., now a division of Netherlands insurer Aegon, built the pyramid and still uses it on its logo despite moving its headquarters from San Francisco to Baltimore.

The tower was San Francisco’s tallest for more than four decades, but has since been eclipsed by the 1,070-foot Salesforce Tower.

Shvo’s company didn’t respond to a request for comment.

“The Transamerica Pyramid is an important part of Transamerica’s history, and we are proud that the iconic building will continue to serve as our corporate logo moving forward,” Jay Orlandi, Transamerica chief operating officer, said in a statement Wednesday.

The deal continues a streak of high-end property acquisition for Shvo and his partners. They bought eight properties worth $3.1 billion in the past year, including the Coca-Cola Building in New York, the “Big Red” office building in Chicago, a Beverly Hills condo site and three hotels in Miami Beach.

Shvo, a native of Israel, has also built projects in Abu Dhabi and Mexico and held art shows in New York. The pyramid is his first acquisition in San Francisco.

Bloomberg first reported the deal.

More changes could come with the switch in ownership. Aegon filed a proposal on Monday to demolish a single-story retail structure attached to 545 Sansome St. and build a 49,999-square-foot office addition. It isn’t clear if the new owners would pursue the expansion.

Architect Jeffrey Heller, whose firm Heller Manus is located on the 12th floor of the pyramid, said the right project could win support.

“I think if one proceeds carefully and with what is allowable within current
zoning, it would be doable,” he said.

Heller Manus designed a proposed condo tower at nearby 555 Washington St., which the city rejected in 2010 after neighborhood opposition led by Supervisor Aaron Peskin, who was not on the board at the time.

Colin Yasukochi, research director at real estate brokerage CBRE, said the
pyramid has always been well-leased even if it doesn’t fetch rents as high as some of the newer towers in the Transbay area. As of last August, the pyramid was 90% leased mostly to financial tenants including Callan, JMP Group and Northwestern Mutual.

“It’s an iconic building, and the sale reflects a lot of investor interest in San
Francisco as well as market demand,” he said. “There is the added value of the opportunity to redevelop part of the site.”

Heller said the pyramid could use a face-lift to attract new tenants.

“It’s been held for so long that it could really use sprucing up of the public areas and lobby,” said Heller.