
The debt ledger for the distinctive 345 California Center, the San Francisco high-rise marked by its twin flagpoles, now reads 'paid in full' following a substantial financial move by its owner, Metropolis Investment Holdings, an affiliate of a Chicago-based firm. The full $150 million debt on the property was cleared after the owner settled the tab with Massachusetts Mutual Life Insurance Company, according to the SF Examiner. This achievement places the tower in a relatively exclusive and enviable position as numerous other properties struggle amidst high office vacancy rates in the city, while 345 California Center boasts many amenities enticing to tenants.
Metropolis showcases a debt-free portfolio that spans approximately 6 million square feet of premium Class A office towers across several key cities beyond San Francisco. The portfolio also includes a range of hotels, retail spaces, parking facilities, and land sites, which can be perused on the company's website, according to details provided by ConnectCRE. Not resting on their laurels, Metropolis's managing director, Tom Dempsey, spoke on their business approach, emphasizing asset quality and market-adaptive leasing sans overly intricate financing.
Concurrent with their debt announcement, 345 California Center has also welcomed a new tenant, Degenkolb Engineers, who will take over 17,000 square feet of the building, as Dempsey told ConnectCRE, "Our long-term hold approach puts us in the enviable position of having a low-cost basis, and paying off the loan reaffirms our commitment to the San Francisco office market." The leasing negotiations were handled by Cushman & Wakefield for the tower and JLL for Degenkolb Engineers.
Leasing momentum for 345 California Center, currently at 84% capacity, seems optimistic, per Dempsey's remarks to the SF Examiner, with tenants drawn to stable ownership and consistent investment in amenities that benefit their employees over their leases. Some upcoming amenities include a business conference center and an indoor golf simulator. However, the property is not immune to challenges faced within the commercial real estate space in San Francisco, particularly highlighted by its litigation with the operators of the Four Seasons Hotel situated within the tower, as Dempsey hopes for a positive resolution with Westbrook Partners, who currently manage the hotel.