Transamerica Pyramid Sells at a Loss for $692 Million

San Francisco’s Transamerica Pyramid officially sold at a loss, according to new public documents outlining the transaction.

Cyprus-based investment firm Yoda PLC paid $691.6 million for one of the city skyline’s crown jewels. That falls quite short of the billion dollar investment put into the building by the prior ownership group, led by German pension fund Bayerische Versorgungskammer and its partners, Munich-based private equity firm Deutsche Finance Group and New York developer Michael Shvo.

Another small pension fund based in Hesse, Germany had invested $67 million in preferred equity into the property and expected to lose it all, Bloomberg reported on March 6.

Yet, while his partners are set to take a significant hit, Shvo walks away with a separate, eight-figure payout as part of the deal.

Shvo and his companies — Shvo Group, Shvo Property Management, and Shvo Brokerage — received $34 million from Yoda PLC. The package covers his commission for “representing both sides” in the transaction, the fee for the termination of his services on the property and the buyout of his right-of-first-offer agreement.

All-in, Yoda PLC paid $725 million to close the deal. Shvo did not immediately respond to requests for comment.

With Shvo, the Germans bought the Transamerica Pyramid from Dutch insurance company Aegon in 2020 for $650 million. It then initiated a $400 million makeover that raised the property from a crumbling monument of a bygone era into one of the city’s most exclusive and sought-after office leases. Shvo brought in starchitect Norman Foster to lead the renovation, which added a public cafe, exhibition space and urban pocket park on the ground floor.

BVK warned last year that total losses on those deals could reach nearly $1 billion. Rumors around the breakup between Shvo and his German partners had been swirling for the better part of a year and came to a head in January when multiple outlets reported that the Germans were trying to force Shvo out of the Transamerica Pyramid. Shvo initially rejected the rumors.

Yoda PLC’s purchase of the Transamerica Pyramid is the firm’s foray into U.S. real estate and is part of a larger strategy to move into the western market, according to a statement from CEO Alon Barr.

“We are actively evaluating additional opportunities across key metropolitan markets and developing a structured acquisition pipeline in the United States,” the statement read. “The Transamerica Pyramid Center structure will serve as the anchor from which we intend to expand, accelerating the growth of our U.S. portfolio over the coming years.”

Once known as the “office king of Romania,” Ioannis Papalekas, Yoda’s founder and controlling stakeholder, is no stranger to commercial real estate. Between 2001 and 2020, Papalekas amassed a 5.4 million-square-foot portfolio of office space in the country — much of which he acquired after the global financial crisis of 2008. Papalekas founded investment company Globalworth Real Estate Investments in 2013 and grew its portfolio of Romanian and Polish assets to $3.5 billion.