Transamerica Pyramid Reopens Following $400M Makeover
SHVO and Deutsche Finance have teamed up with Foster + Partners to complete the landmark tower's renovation.
Transamerica Pyramid Center, which has provided a distinctive pyramid shape to the San Francisco skyline for more than 50 years, has reopened as part of a $400 million renovation by owner SHVO and Deutsche Finance, in partnership with noted architect Lord Norman Foster and his design firm Foster + Partners.
The renovation was extensive, with a particular focus on the 510,000-square-foot building’s common areas. Among other major changes along those lines, the building now has a grand lobby, a space that the previous iteration lacked, with a coffee bar, gift shop and florist. The building also has new gathering places, including a gym, spa, conference spaces and, for tenants only, a bar on the 27th floor, and a top-floor bar.
Besides the pyramid-shaped main building, the renovation also involves two smaller components that are part of the complex, including an office building at 505 Sansome Street, and a site set for about 100,000 square feet of office redevelopment at 545 Sansome Street.
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Anchoring the three buildings is Redwood Park, consisting of a grove of mature redwood trees shading public open space. The renovation fully refurbished the park, connecting it to the buildings for the first time.
The 853-foot main building is reportedly 70 percent occupied, though more space might be taken, pending negotiation. The building is also one of the more expensive in the country, with space reportedly fetching more than $200 per square foot on occasion, but more often in the $125 to $180 range.
As part of the reopening, the building’s spire was re-lit for the first time with over 1,300 newly installed LED lights, which is part of a new lighting design for the structure from the base to the spire, both interior and exterior. Lighting specialist L’Observatoire International undertook the lighting re-design.
SHVO acquired the complex at the height of the pandemic in 2020 with financing from Deutsche Finance America and German pension fund Bayerische Versorgungskammer, for $650 million. With the renovation costs included, the owners have put north of $1 billion in the property.
Some of SHVO’s other properties include the Raleigh Hotel in Miami Beach, 333 South Wabash Avenue in Chicago, Mandarin Oriental Residences in Beverly Hills, Mandarin Oriental Residences Fifth Avenue in New York City and the AMAN New York Hotel and Residences at the Crown building.
San Francisco office market still tough
In the post-pandemic years, the city of San Francisco continues to have a huge hangover of office space, with the market’s office vacancy rate coming in at 36.8 percent as of the second quarter of 2024, according to CBRE. The quarter saw 290,000 square feet of negative net absorption.
Still, tenants took about 2 million square feet in the market in the second quarter, making it the second-best quarter for leasing activity in the last two years, only behind the fourth quarter of 2023, noted CBRE.
Rents dropped by 7 percent year-over-year, with the average direct asking rate down 0.2 percent for the quarter, coming in at $68.43 per square foot in the second quarter of 2024. CBRE also reported that no significant office project was under construction in the city as of the second quarter.
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