Shvo And Partners In Contract To Sell Transamerica Pyramid

Michael Shvo, Shvo, BVK and Deutsche Finance America are in contract to sell the Transamerica Pyramid to Yoda PLC, a public company listed on the Cyprus Stock Exchange.

No price was disclosed, but the deal is expected to close in April, according to a source with knowledge of the deal.

For months, rumors have ricocheted through the city’s tight-knit brokerage and private equity circles that Shvo might soon part ways with the 48-story tower at 600 Montgomery Street – the emblematic spike on the skyline that has become closely associated with the brash developer’s brand.

Both the San Francisco Standard and the San Francisco Chronicle recently reported mounting friction between Shvo and the German institutional investors that financed the acquisition and overhaul of the building. According to the outlets, Bayerische Versorgungskammer, Germany’s largest public pension group, and Deutsche Finance Group have moved to oust Shvo as asset manager, citing waning confidence amid a string of recent controversies.

Those issues include Shvo’s high-profile exit from the Raleigh Hotel redevelopment in Miami Beach, a default on a $200 million loan tied to the Mandarin Oriental in Beverly Hills that led to a sale-in-lieu of foreclosure, and an ongoing legal battle with Core Club.

BVK has reportedly faced internal pressure to reassess its U.S. strategy after losing more than $1 billion on American investments, including some that involved 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,” though it did not name Shvo directly.

A spokesperson for Shvo has rejected the reporting as “false.”

As speculation mounted, Shvo pointed to leasing momentum. In January, he said the tower landed a tenant for 4,000 square feet at more than $300 per square foot. The developer told the San Francisco Chronicle the deal would pencil out to $1.2 million annually and potentially set a West Coast office record. He also announced three new leases last week.

In a statement confirming the sale, Shvo said it was a privilege to be a “steward of one of the world’s most iconic skyscrapers,” touting a “hospitality-led vision” that included a design partnership with Foster + Partners. He pointed to the Transamerica Pyramid’s office rents exceeding $300 per square foot and the building’s 85 percent occupancy. “I am confident it will continue to define the skyline and serve generations to come under its next custodian.”

Yoda could not immediately be reached for comment.