Hines received dispatch for an $80 million loan for a 61-story luxury condo, hotel and office building in downtown San Francisco that has yet to break ground.
The Houston-based developer won two loan extensions through October for its Transbay Parcel F property at 442-550 Howard Street, which was due to expire last month, According to the San Francisco Business Timesciting public records.
The pass gave Hines four months to strike deals with New York-based JPMorgan and Singapore-based United Overseas Bank, which each issued $40 million in notes in 2016.
Hines paid $120,000 for the extension.
F4 Transbay Partners — A joint venture including Hines, New York-based Goldman Sachs and San Francisco-based Urban Pacific Development — Approved for construction of the 1.1 million square foot tower in 2021.
Plans for the Transbay F site include 165 apartments, 189 hotel rooms, 275,600 square feet of offices, 20,000 square feet of outdoor park, and 9,000 square feet of land between First, Second, Howard and Natoma Streets ft of shops and restaurants, adjacent to the Salesforce Transit Center.
But the 800-foot silver-and-blue skyscraper has run into headwinds during the pandemic, and demand for offices has plummeted in the age of remote work.
In early 2021, developers demanded a $45 million fee instead of including 33 affordable condos for sale, saying they would not shell out financially. The city heeded the plea.
Subsequently, Salesforce, one of the city’s largest employers, dropped plans to lease 15 floors of offices in San Francisco’s fourth tallest building.
In April 2022, F4 Transbay negotiated an agreement with the Transbay Joint Powers Authority to pay $40 million in damages for delays in building a mixed-use tower that was supposed to be completed this year.
Next year, F4 Transbay has until July 2027 to begin paying Transbay authorities $40 million in four installments.The joint venture was launched in 2016 as $160 million.
A Transbay authority spokesman told The Business Times that the deal to reduce the fine still depends on Hines providing a letter of credit, adding that the developer has not yet provided a new timeline for the project. The consortium had originally planned to break ground last year and complete it by 2027.
Hines, one of San Francisco’s most prolific developers, bought the 1.6 million-square-foot former PG&E headquarters building at 77 Beale Street in 2021 for $800 million. But plans for a 992-foot-tall, 808-unit residential tower have also stalled.
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— Dana Bartholomew
