Paramount Closes $402M Financing for San Francisco Buy
- Dec 16, 2019
Paramount Group Inc. officially closed on $402 million in financing for its acquisition of Market Center, a pair of office buildings in San Francisco’s South Financial District. The financing was provided by ING Capital, which plans to syndicate the loan in early 2020. The initial term for the financing will be five years, with two one-year extension options. In August, Paramount announced it was under contract to pay $722 million for the properties.
Market Center is a Class A office complex housing a total of 753,000 square feet. The taller building, 575 Market St., rises 40 stories and was built in 1975. Currently more than 97 percent occupied, the 472,564-square-foot property underwent cosmetic renovations in 1995, 2012 and 2017, per Yardi Matrix data.
The second office component, 555 Market St., is a LEED-Certified Silver building totaling 283,334 square feet. Built in 1964, the Class A office property is currently 100 percent occupied and underwent cosmetic renovations in 1995, 2002, 2012 and 2017.
The office towers are linked together through an elevated walkway and landscaped garden plaza which are near several major transit hubs, including the Transbay Transit Center, the Montgomery BART station and the San Francisco Bay Ferry.
Expanding in San Francisco
The financing deal comes weeks after Paramount closed on a $1.3 billion refinancing of Paramount Plaza, a 48-story office tower in Midtown Manhattan. Paramount used the proceeds from the refinancing to repay the existing $1 billion loan the firm secured in 2015.
Paramount has significantly grown its San Francisco footprint over the past year. In February, the firm picked up 111 Sutter St., a 293,000-square-foot historic office building in the city’s Financial District, for $227 million, in a joint venture with Harbor Group International. Later in the year, the company completed the $402 million purchase of 55 Second St., a 387,000-square-foot LEED Platinum-certified office property in the South Financial District. Paramount purchased the asset in a joint venture with an unnamed partner.