Allianz Real Estate, ranked as the world’s largest real estate investor, and Barings, one of the world’s leading financial services firms, announced today that they have co-committed a total of USD319.1 million (EUR282 million) in debt financing under a co-lending agreement to fund the acquisition of 650 Townsend, a premier creative office building in San Francisco. The asset is being acquired through a sale-leaseback arrangement with the major tenant.
Barings, who arranged the financing on behalf of an institutional investor, will be the lead lender and administrative agent for the transaction, with Allianz co-investing on a pari passu basis.
“The debt financing of 650 Townsend demonstrates Barings’ ability to identify attractive debt investment opportunities across all property sectors and reflects our confidence in the long-term growth of San Francisco, especially as new development opportunities remain limited,” said Dan Hartley, Head of RE Debt Origination in the U.S. at Barings. “We are excited to partner with Allianz on this transaction and showcase Barings’ ability to provide creative financing solutions to strong sponsors that own high quality real estate.”
“We are delighted to announce this latest transaction, a compelling opportunity to expand in the highly attractive San Francisco office market, which has grown significantly in recent years as a result primarily of the booming technology sector,” said Christoph Donner, CEO, Allianz Real Estate of America. “650 Townsend is one of San Francisco’s distinctive office properties in a vibrant, 24/7, ‘Live, Work, Play’ environment that attracts and retains employers and professionals alike. This new transaction also enables us to deepen our existing relationships with prime partners such as CalSTRS, Beacon Capital Partners and another institutional investor.”
650 Townsend is located at the crossroads of San Francisco’s SOMA and Showplace Square Districts. The six-storey property features 685,000 square feet of flexible office space, multiple atriums and unrivalled tenant amenities including two onsite cafeterias, a basketball court, gym, a theatre, on-site retail facilities and numerous collaborate workspaces.
Built in 1990, the building was renovated in 2011 and 2018 and was awarded LEED Gold status in 2017. It is currently leased to a strong line-up of tenants anchored by high-profile technology firms. The asset has benefitted from significant capital investment, with over USD115 million in work completed or in progress since 2012.