Paramount Group has locked in longtime tenant First Republic Bank again, signing the financial services provider to a 265,000-square-foot lease expansion at its approximately 645,000-square-foot One Front Street office tower in San Francisco. First Republic’s new commitment expanded the company’s occupancy to 515,000 square feet—or 80 percent of the building’s office space—and pushed the property’s occupancy to 100 percent.
With the First Republic lease transaction, Paramount achieves a goal it had established upon purchasing the 38-story trophy asset from Invesco Real Estate in a $521 million cash deal in December 2016. Completed in 1981, the 38-story tower is LEED Gold certified, according to Yardi Matrix information. The landlord followed the transaction with another deal that increased the Skidmore, Owings & Merrill-designed office high-rise’s lease level to a full 100 percent.
“We have effectively eliminated all of the expirations that were foreseeable at closing,” Albert Behler, president & CEO of Paramount Group, said in a prepared statement.
Lease and repeat
Paramount recently completed the acquisition of another San Francisco office property, the 293,000-square-foot tower at 111 Sutter Street. The office building sold at more than two times the initial acquisition cost and the REIT plans to execute the same program that proved successful at One Front Street.
“The building (111 Sutter Street) is currently 70 percent occupied plus roughly half of the in-place leases are scheduled to roll in the next 3 years. Similar to One Front and 50 Beale, we are well-positioned to take advantage of the availabilities as well as the roll,” Peter Brindley, executive vice president of leasing at Paramount Group, said during the REIT’s fourth quarter 2018 earnings conference call on February 14, 2019.