SAN FRANCISCO and LOS ANGELES–The Hill Companies, which owns the leasehold improvements at 1700 California Street, San Francisco, has acquired the fee interest under the 142,900-square-foot mixed-use development.

Los Angeles-based Mesa West Capital provided a $60.8 million first mortgage loan to finance the fee acquisition of the property and refinance the existing leasehold mortgage.  A portion of the loan proceeds will be used to refinance the existing leasehold mortgage on the 10-story building, which was acquired by the Hill Companies in 2001.

Built in 1987, the building includes 87,852 square feet of office/medical office space, 47 luxury multifamily units and 7,938 square-feet of street level retail anchored by Ruth's Chris Steak House. The building also has a 205-stall subterranean garage. The commercial and residential components of the property are 100% and 96% occupied, respectively.

“Collapsing the fee and lease-hold interests increases the liquidity and value of the asset and achieves an important long-term goal for the sponsorship,” said Mesa West principal Ronnie Gul who originated the financing. “1700 Cal is well positioned to capitalize on San Francisco's strong multifamily market and the forthcoming California Pacific Medical Center's $2 billion Cathedral Hill hospital project located within a few blocks of the property which is expected to increase medical office demand and rental rates at the property.”

1700 California is part of Denver-based Hill Company's portfolio of active investments including multifamily units in California, Washington and Arizona and retail and office space in California.

The financing was arranged by Ramsey Daya and Chris Moritz of San Francisco-based Regency Capital Partners.