Homeowners of Main SF Workplace Properties Bullish on Refinancing

A few of San Francisco’s prime buildings face looming mortgage fee deadlines within the wake of Westfield’s mall departure. No worries, main landlords say.

Regardless of record-high workplace emptiness charges and decrease foot site visitors, house owners of a number of the greatest properties are assured about paying off loans, the San Francisco Chronicle reported.

Town’s fourth-tallest constructing, an workplace tower at 555 California Road, is valued at greater than $1 billion. It’s tied to a $1.2 billion mortgage due in Could.

The previous Financial institution of America headquarters is owned by New York-based Vornado Realty Belief and The Trump Group, which simply prolonged the mortgage’s maturity date for one yr. Goldman Sachs, KKR, Microsoft and Financial institution of America all have renewed leases with out downsizing.

On an earnings name final month, executives mentioned “there’s by no means been a risk of default. There’s by no means been a problem with this mortgage.”

One Market Plaza, one other $1 billion workplace tower at 1 Market Road, is house to Google, Autodesk and Visa. The property, owned by Blackstone and Paramount Group, each based mostly in New York, has a $975 million mortgage due in February.

Thomas Bravo, GIC and Novo Holdings have signed new leases, whereas Visa and Autodesk have listed places of work for sublease, however should pay lease till they discover subtenants.

“One Market Plaza is a high-quality, trophy workplace asset that’s (round) 96 % leased and has seen extra leasing exercise because the onset of COVID than every other main workplace campus in San Francisco,” a Blackstone spokesperson advised the Chronicle.

Stonestown Galleria, a 775,000-square-foot mall at 3251 twentieth Avenue, is house to greater than 125 outlets and eating places. The property owned by New York-based Brookfield Properties has a $180 million mortgage due in October.

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However not like the struggling Westfield San Francisco Centre, foot site visitors has exceeded 2019 ranges and new retailers and eating places proceed to open.

“We’re snug that we will handle the mortgage maturity,” Lindsay Kahn, a Brookfield spokeswoman, advised the Chronicle. “Moreover, Stonestown Galleria stays a wholesome, thriving vacation spot for the neighborhood and has rebounded because the pandemic.”

Though San Francisco’s prime workplace and retail properties nonetheless appeal to demand throughout what brokers name a “flight to high quality,” the market faces challenges as loans come due.

“Throughout the board, San Francisco has been taking a beating,” David Putro, head of business actual property analytics at Morningstar Credit score, advised the newspaper. “It has turn out to be extremely troublesome to refinance for all places of work.”

With weakened demand and rising rates of interest, it’s more durable for house owners to refinance loans, forcing some to both pay in full or threat foreclosures.

But property house owners are assured they will refinance tens of thousands and thousands of {dollars} in loans set to mature this fall and in 2024, in accordance with the Chronicle.

They embrace the house owners of the previous headquarters of Charles Schwab at 211 Essential Road; the Hilton San Francisco Monetary District at 750 Kearny Road; a constructing that faces Union Sq. at 212 Stockton Road; and a SoMa workplace constructing at 149 New Montgomery Road.