TDA Investment Group has poured $47 million from pension funds to buy properties in San Francisco’s Chinatown and South of Market.
The San Mateo-based institutional investor used $17 million in pension money to buy a three-story, mixed use building at 670 Clay Street, in Chinatown, the San Francisco Business Times reported.
TDA dubbed it a “friendly” deed-in-lieu of foreclosure deal with its former owner, an affiliate of Solana Beach-based Brixton Capital.
The investment firm then sank $30 million into a commercial mortgage-backed securities loan for an undisclosed project in SoMa.
“While short-term issues dominate the headlines in San Francisco — we realize, some of which are severe — pension capital such as ours takes a longer-term perspective,” Paula Purcell, executive vice president and chief development officer for TDA, told the Business Times in an email.
“Fundamentally, areas like Chinatown, the Financial District and many other submarkets in San Francisco still need quality mixed-use real estate offerings, from residential to office to retail uses.”
TDA Investment manages pension capital and is investing across the Bay Area, the Golden State and throughout the West, the company said. The firm said it sank more than $100 million into San Francisco construction projects, for-rent and for-sale residential projects, plus a development site bridge loan.
In May, TDA acquired a project to build two five-story buildings at 130 Townsend Street from Presidio Bay Ventures in another deed-in-lieu deal stemming from a $15.5 million pre-development loan in 2019. TDA and Presidio now work together to complete the project.
The $30 million in a CMBS refinancing was not connected to the 130 Townsend project, according to Purcell.
TDA sees potential for residential, office and retail uses at 670 Clay Street, a multi-parcel deal which includes 659 Merchant Street and 700 Kearny Street, with 150 single-residence-occupancy units.
Brixton was $18.1 million in debt on a loan from TDA when it handed over the deed and walked away from its investment.
TDA, which has held onto some of its 30 properties nationwide for decades, said it’s in for the long haul, with no intention of flipping the property.
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“In many ways, we are the antithesis of a disinterested financial investor,” Purcell told the Business Times.
TDA Investment Group, founded in 1980, has amassed three pension fund clients, which five years ago had more than $8 billion in assets, according to its website.
— Dana Bartholomew