Shvo reportedly on shaky footing at Transamerica Pyramid

Rumors have been swirling for months in San Francisco, with C-suite executives, broker agents and private equity managers speculating that Michael Shvo might soon be out from the Transamerica Pyramid, the emblematic piece of city skyline that is now firmly linked to the brash developer’s persona.

The San Francisco Standard and the San Francisco Chronicle each published stories attempting to drill down on the rumors, and both reported growing discontent with Shvo and his eponymous development company, SHVO, among the institutional German investors who have financed the acquisition and renovations that returned the pyramid to its premiere status.

The outlets say Bayerische Versorgungskammer (BVK), Germany’s largest public pension group, and investment firm Deutsche Finance Group, have moved to oust Shvo as the asset manager, citing waning confidence against the backdrop of a series of recent issues involving Shvo, including his dramatic exit from the Raleigh Hotel development in Miami Beach, defaulting on a $200 million loan that led to the sale-in-lieu-of-foreclosure at the Mandarin Oriental in Beverly Hills, and an ongoing lawsuit with Core Club. In November, the Core Club filed a lawsuit against Shvo accusing him of being engaged in a yearslong Racketeer Influenced and Corrupt Organizations (RICO) conspiracy.

BVK has reportedly faced pressure from its members to clean up its U.S. strategy after the fund apparently lost more $1 billion on its American investments, some of which involve Shvo. Deutsche Finance Group told the Chronicle that BVK was “currently reviewing the appointment of a new operating asset manager for the U.S. real estate portfolio as part of a structured selection process.” However, the group did not specify that this involved Shvo.

A spokesperson for SHVO has rejected the reporting as “false.” Last week, SHVO announced three new leases at the Transamerica Pyramid. One of the leases, for 4,000 square feet, went for more than $300 per square foot, according to the announcement, which allegedly set a West Coast record for office space. The new contracts put the Transamerica Pyramid at 85 percent leased.

Of note: Shvo has tapped Goldin Solutions, a PR firm that, among other things, specializes in crisis communications. Goldin Solutions has managed the media strategy for the likes of WeWork founder Adam Neumann, Gawker Media during the Hulk Hogan trial, a branch of the Sackler family amidst the opioid crisis, and former Today Show host Billy Bush following fallout from then-presidential candidate Donald Trump’s Access Hollywood tapes.

Could California get another governor with mayoral experience?

Matt Mahan, the first-term mayor of San Jose, has thrown his hat into an already crowded but uninspiring field for California governor.

Mahan, 43, is a Harvard graduate who got his start as a tech entrepreneur before waging a successful campaign for San Jose City Council in 2020. Mid-way through his first term, he jumped into the mayor’s race and edged out political veteran Cindy Chavez for the seat. He now looks to continue his streak of first-term political promotions.

In a state with a wide left-of-center political spectrum, Mahan has fashioned himself as a moderate and pragmatist, cut in a similar shape as San Francisco Mayor Daniel Lurie. Mahan has hyperfocused on housing, homelessness, and crime during his three years at the helm.

He sponsored a change to the city’s camping ordinance that allowed police to arrest and charge unhoused who camp on public property and repeatedly refuse shelter. Under Mahan, San Jose was the first city to opt-in to a state law that allowed homeowners to sell accessory dwelling units at condos, and this week the San Jose City Council unanimously approved a series of changes that lower affordability thresholds on developers and clear expensive bureaucratic hurdles to convert empty downtown offices buildings into housing. He racked up potential campaign talking points on public-safety as the most prominent Democrat to take on Gov. Gavin Newsom in campaigning for 2024’s Prop 36, which sought to employ harsher penalties for crimes of desperation, such as drug offenses and theft. Nearly 70 percent of voters supported the measure. He has supported adding officers to the San Jose Police Department.

Mahan also made a splash last summer when he called out Newsom’s high-profile communications strategy of mirroring Trump’s rambling, petulant and often petty approach to social media.

“Maintaining our success requires a relentless focus on the facts in the real world, not a blind leap into meme land,” Mahan wrote in an August op-ed for the San Francisco Standard.

The mayor’s entrance into the race has already earned a ringing endorsement from one of the state’s most powerful developers, Rick Caruso. Caruso wrote on X that he “encouraged” Mahan to run, “and I’m delighted he is entering the race.”

Many believe Mahan’s campaign will benefit from his ties to the tech community, for which San Jose has remained at the center of gravity. Shortly after Mahan’s announcement, Garry Tan, president and CEO of the überinfluential Silicon Valley tech accelerator Y Combinator, posted on X that the San Jose mayor was “the real deal.”

“California desperately needs this. Not more vibes. Not more trolling. RESULTS,” Tan wrote.

Mahan enters a race that includes Rep. Eric Swalwell, former gubernatorial candidate Katie Porter, former state attorney general and U.S. health and human services secretary Xavier Beccera, billionaire entrepreneur Tom Steyer, and former Los Angeles mayor Antonio Villaraigosa, among others.