SAN FRANCISCO—Mesa West Capital has provided locally-based investment firm Stockbridge Capital Group with a $185 million loan to recapitalize 140 New Montgomery.
The 26-story historical class A building was constructed in 1925 as the headquarters for Pacific Telephone and Telegraph and was the tallest building in San Francisco at the time. The telephone company had owned the building until its acquisition by Stockbridge in 2007. The collateral includes a 411-stall, 8-story structured parking garage adjacent to the property.
Ownership is completing a $100 million renovation of the property which includes brand new state of the art building systems (including mechanical, electrical, plumbing and fire protection systems), a multi-million dollar seismic upgrade and more than 1,300 new operable windows in the tenant spaces. The property is anchored by business review website Yelp!, which leases approximately 150,000 square feet on 12 floors. Overall, the building is 90% leased. Other tenants include enterprise management software developer Software AG, online neuroscience research company Lumosity, design firm Knoll Inc., and three financial services firms.
“140 New Montgomery is a trophy asset that caters to both technology tenants and boutique financial services firms drawn to its unique combination of having the profile and views of a high-rise, institutional asset and the high-ceilings and open office environment found in creative office projects,” said Mesa West principal Ronnie Gul, who originated the financing. “The property benefits from its location in the South Financial District in close proximity to the Transbay Transit Center Project which is further solidifying the desirability of this location.”
The five-year term financing included mezzanine debt that was sold to an institutional investor.
This is Mesa West’s second significant financing in San Francisco in the past several months. In December, the Los Angeles-based portfolio lender funded a $60.8 million loan to finance the fee acquisition of a mixed-used project at 1700 California St.