Michael Shvo’s $1 billion investment in San Francisco’s Transamerica Pyramid may pay off with the help of a major trophy office lease.
Locally based global law firm Morgan Lewis is close to inking a deal for nearly 130,000 square feet across seven stories at the 48-story office tower at 600 Montgomery Street, in the Financial District, the San Francisco Chronicle reported, citing unidentified sources.
Financial terms of the 20-year lease were not disclosed. Both the law firm and representatives of Shvo declined to comment to the newspaper.
In 2020, New York-based Shvo partnered with Deutsche Finance America and European investors led by German pension group Bayerische Versorgungskammer to buy the 763,000-square-foot pyramid campus for $650 million, or $852 per square foot.
The firm then poured another $400 million into upgrades, completed this fall, to make the property into the “Rolls Royce” of offices. Total outlay: more than $1 billion.
The results were apparently enough to draw Morgan Lewis, which will uproot from its longtime hub at One Market Plaza, where three buildings contain 1.6 million square feet of offices at 1 Market Street, on the Embarcadero.
Morgan Lewis now leases about 150,000 square feet across five floors in the 42-story Spear Street tower. Its lease at One Market Plaza ends at an unspecified date next year.
It’s not clear when the law firm will relocate to its new headquarters at the Pyramid, on the edge of the Financial District near trendy Jackson Square. The move will give Morgan Lewis lawyers 13 percent less space to do their work than at their current hub.
The 853-foot Transamerica Pyramid, built in 1972 on a design by William Pereira, is the second tallest building in San Francisco. The white quartz tower was renovated by Shvo with a new wellness center, restaurants, meeting rooms, a sky lounge and tenant-only sky bar.
The move by Morgan Lewis will impact One Market Plaza, whose landlords are still reeling from the pending exits of major firms such as Visa, Autodesk and Google.
A year ago, owners Paramount Group and Blackstone, both based in New York, secured a three-year-extension on a $975 million loan tied to the office campus, which was 96 percent occupied.
That was after Visa put its 190,000-square-foot headquarters up for sublease and moved to a new 300,000-square-foot hub at Mission Rock. And Autodesk listed 73,000 square feet for sublease, citing a shift to remote work.
In May, Google announced it would clear out of its 300,000-square-foot office at the Spear Tower in One Market Plaza to consolidate operations at 345 Spear Street.
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