By Meghan Hall
For the first time in its history, San Francisco’s iconic Transamerica Pyramid has traded hands. In a deal confirmed by the buyers, SHVO and Deutsche Finance America purchased the asset in a joint venture for $650 million. German pension fund Bayerische Versorgungskammer, or BVK, was also involved in the purchase of the property. The deal is the largest commercial real estate transaction in the country since the pandemic began, and has been highly anticipated after an extended due diligence period.
Dutch insurance firm and seller Aegon has owned the building since 1999 when it bought Transamerica Corporation. The building itself first opened in 1972. The property consists of three office buildings totaling nearly 760,000 square feet.
“We’re proud to take on ownership and management of the Transamerica Pyramid – the most famous and recognizable skyscraper on the West Coast, and one of the most memorable office towers in the world,” stated Michael Shvo, chairman and CEO of SHVO. “This iconic tower is an important addition to our portfolio of celebrated properties, enduring landmarks, and architectural gems. It’s a classic building for all time that mirrors the forward-looking spirit of the Bay Area and of our own company. We’re thrilled to bring this property into its next renaissance.”
At a height of more than 800 feet, the Transamerica Pyramid is recognized as a “crown jewel” within San Francisco’s skyline. For nearly half a century after its completion, the pyramid remained the tallest building in the city. The building features an exterior covered in quite quartz and more than 3,000 windows, as well as floor plates ranging in size from 3,000 square feet to 20,000 square feet.
Aegon retained naming rights in the deal, so the branding will remain the same. However, the new ownership does have plans to renovate the asset.
The Registry reported in February that initially, the purchase price for the property was more than $700 million. A delayed closing process ultimately cut the finals sales price down nearly $60 million.
This was the second time that the sellers have put up at least a partial interest in the sale of the Transamerica building in as many years. The first time an offering was made was in January 2018 when a 45 percent interest in the property was placed on the market for sale. HFF, which was acquired by JLL last year, was the listing agent on the partial sale at the time. A deal on the partial sale was never completed.
The deal marks SHVO’s first acquisition within the city of San Francisco. The luxury real estate firm is known to target high-end assets in strong markets. It has a portfolio valued at more than $7 billion according to its website and has been pursuing large transactions almost undeterred. In another joint venture with Deutsche Finance, the company purchased Chicago’s “Big Red” building for $476 million. The deal closed in August.
“This marquee property in one of America’s most picturesque cities is a game-changing next step in our already strong portfolio of exceptional investments,” added Deutsche Finance America’s Jason Lucas. “This is yet another example of SHVO and DEUTSCHE FINANCE GROUP seeking out the best and highest quality prime assets to add to our thriving national portfolio.”