By Meghan Hall
Financial services provider First Republic Bank has agreed to a significant lease expansion at One Front Street in San Francisco’s Central Business District. According to a statement released by landlord Paramount Group Inc. at the beginning of May, First Republic has agreed to take an additional 265,000 square feet of space, bringing its footprint in the building to 515,000 square feet, or 80 percent of the building’s total square footage. Prior to First Republic’s expansion, One Front Street was 92 percent leased.
“We are thrilled that First Republic has elected to expand its footprint at One Front Street. As a growing financial services provider, First Republic’s choice to further expand in One Front Street reflects the desirability of the building’s location, efficient floor plates and exceptional views of both the Golden Gate and Bay Bridges,” said Albert Behler, Chairman, Chief Executive Officer and President of the Company in a statement. “Since acquiring One Front Street just over two years ago, we have effectively eliminated all of the expirations that were foreseeable at closing.”
Paramount Group, based in New York, originally purchased the trophy tower in December 2016 for $521 million, or approximately $800 per square foot. The seller was Atlanta-based Invesco Real Estate who sold the building on behalf of the Florida State Board of Administration. Invesco had originally purchased the 38-story, 645,000 square foot office tower back in 1996 for 103 million.
Paramount Group intended to take a proactive approach in its management of the building in an effort to increase the net operating income of the property. At the time, many of One Front’s existing leases were about 20 percent below market rate. The investment trust was also considering other strategic investment options, such as possible redevelopment opportunities or bringing on a joint venture partner.
Located on the corner of Front and Market Streets, One Front Street was 99 percent leased at the time Paramount purchased the property. The building’s amenities include a 290-space parking garage, as well as 24-hour a day, seven-day-a-week access and security. One Front Street is also LEED Gold certified. Floor plates in the building average between approximately 18,000 square feet through the 32nd floor and then taper off with setback terraces on floors 33 through 36. The building also has ground level retail that includes Philz Coffee, Coast Poke and Front Door Café.
The building is also two blocks from the Transbay Transit Center, several MUNI bus stops and the Embarcadero BART station. Overall, the property is well-positioned to accommodate First Republic as it continues to grow. According to the firm’s first quarter financial results, First Republic’s year-over-year net interest income has increased by 15 percent and revenues were up $807.4 million, or 12 percent. Currently, First Republic has more than $100 billion in total bank assets, and since its founding in 1985, the financial provider has expanded its presence across the country with offices in San Francisco, Portland, Boston, New York City and others.
“First Republic is very pleased to partner with Paramount to secure high-quality office space at One Front Street, which will support our continued growth and delivery of exceptional client service,” said Jim Herbert, Chairman, Chief Executive Officer and Founder of First Republic Bank in a statement.
Paramount Group did not immediately respond to The Registry’s request for updated comment.