Vornado Realty Trust and former President Donald Trump will turn a third of an office building in San Francisco into an art museum. The downside: the new tenant won’t pay rent or utilities.
The New York- and Florida-based investors have agreed to allow the Institute of Contemporary Art San Francisco to take up 26,000 square feet at 345 Montgomery Street, in the Financial District, the San Francisco Business Times reported.
The two-year-old museum will move from its home at 901 Minnesota Street in San Francisco’s Dogpatch in October. The New York Times first reported the museum’s relocation into the ground floor and basement.
Vornado, which has a controlling interest, offered the museum a two-year stint at the 78,000-square-foot building, one of three buildings that makes up the 1.8 million-square-foot 555 California campus. The Trump Organization, the former president’s company, holds a passive minority stake.
A spokesperson for Vornado declined to disclose the terms of the partnership between the real estate investment trust and Contemporary Art San Francisco.
Glen Weiss, Vornado’s co-head of real estate, said in a statement that the museum guest would “further enliven and elevate the Financial District as a nexus for culture and commerce.”
The overall occupancy of the Modernist building known as “The Cube” was not disclosed. The museum will breathe new life into the five-story building at Montgomery and California streets.
Vornado sued the building’s last tenant, a unit of coworking platform Regus, after the company tried to terminate its 15-year lease in 2019 because of a dispute over building signage. As part of a settlement deal last year, Regus paid Vornado $21.35 million.
The museum is the latest non-traditional tenant to fill offices in San Francisco’s Downtown, where some landlords are looking to nonprofits or cultural organizations to fill gaps left by tech and other professional service tenants. The office vacancy is 37 percent, according to CBRE.
This summer, Mayor London Breed’ touted the launch of the second phase of Vacant to Vibrant, a city-backed program that works with small businesses to fill vacant storefronts in Downtown.
Boston-based office landlord BXP launched its own version of the program, working with small business owners to set up flexible leases to fill retail vacancies.
Vornado, which has a 70 percent stake in the 555 California campus with sole decision-making authority, spent tens of millions of dollars renovating 345 Montgomery.
The building was once a flagship branch for Bank of America, which until 1998 was based next door at 555 California Street, a 52-story skyscraper once known as Bank of America Tower, and remains one of its largest tenants.
The publicly traded Vornado Realty Trust, founded by Stephen Roth in 1982, owns 20 million square feet of offices, primarily in New York, according to its website.
— Dana Bartholomew
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