Square Mile Capital Provides $136.4MM Loan to Clinton Reilly Secured by Two San Francisco Office Buildings

Jackson Square, BART, MUNI, Clinton Reilly Organization, Square Mile Capital, San Francisco

Square Mile Capital Management LLC (“Square Mile Capital”) today announced that it has originated a $136.4 million first mortgage and mezzanine loan cross-collateralized and secured by 235 Pine Street and 535 Pacific Avenue, a pair of office buildings totaling 196,781 square feet located in San Francisco, CA.

The loan was made to the Clinton Reilly Organization who acquired 235 Pine subject to the financing and who has owned 535 Pacific since 1992. Square Mile Capital’s loan includes acquisition proceeds for 235 Pine, refinancing proceeds to repay the existing debt on 535 Pacific, and future proceeds to fund leasing and capital expenditure costs for both properties.

235 Pine is a Class A, 161,380-square-foot building designed by Skidmore Owings Merrill in 1990 and renovated by CBRE in 2016. The 25-story building features abundant light and air exposure, 8,500-square-foot column-free floorplates enabled by side core construction, four levels of parking totaling 110 spots, central air conditioning, a newly renovated lobby and common area, newly modernized elevators, and high-end creative finishes throughout the building. The property is over 90 percent leased to a diverse roster of tenants. The building also benefits from the variety of nearby amenities, including various retail/dining options on Market Street located 2 blocks away. Additionally, the property is easily accessible from the Bay Bridge located 5 blocks away as well as public transit which includes the BART, MUNI, trolleys, and buses.

535 Pacific is a recently renovated 35,401 square feet boutique building located in the Jackson Square submarket of San Francisco. Constructed in 1907, with renovations completed in 1987 and 1999 it was most recently modernized in 2015 with significant capital improvements. The Jackson Square submarket is characterized by low-rise office buildings, art galleries, walkable high-end retail, and award-winning restaurants. The area is popular with tenants such as VC companies, boutique law and financial firms, and technology/creative tenants that are drawn to the presence of a full-building identity. As such, the lack of available space and dearth of developable land has kept vacancy below 5 percent over the past few years. The area is conveniently accessible via BART, MUNI, trolleys, buses, and bicycles.

Square Mile Capital Principal Michael Mestel said, “235 Pine and 535 Pacific have both benefitted from high-quality ownership and significant capital investment over the past few years, as evidenced through the momentum and quality of recent leasing activity. We believe that these well-located, first- class assets will be well positioned for continued success. Overall, we believe that the positive demographic trends and robust market fundamentals will continue to sustain San Francisco’s office market. We are excited to continue our relationship with the outstanding Clinton Reilly Organization on this transaction.”

About Square Mile Capital Management LLC
Square Mile Capital Management LLC is an integrated institutional real estate and investment management firm based in New York. The firm’s commercial real estate debt platform provides customized capital solutions for real estate assets throughout the United States. Square Mile Capital’s opportunistic platform takes a value-oriented approach to its investment activities, with an emphasis on opportunities to invest in real estate assets or enterprises that are undervalued, complex or under-capitalized.