The owner of a San Francisco skyscraper with ties to President Donald Trump wants the market to know it’s up for grabs.
Steven Roth, CEO of Vornado Realty Trust, on Tuesday told investors, without any prompting, that the 52-story skyscraper at 555 California St. “may be on the for-sale list for the right deal at the right time.”
The New York-based real estate company partnered with The Trump Organization in 2007 to purchase the property, along with another office tower in Manhattan, for approximately $1.8 billion.
According to loan documents, Vornado owns a 70% stake, and 30% is owned by Trump.
“Our mission is to increase our stock price. That’s our sole mission,” Roth said on the quarterly earnings call when asked why he brought up the topic of a potential sale.
“We will sell for the right price at the time,” he added. In addition to 555 California, the CEO raised the prospect of offloading a 3.5-million-square-foot office building in Chicago known as The Mart.
“Nothing is sacred,” he said. “So we look upon them as a financial asset, and we will do what we think is the best financial outcome for the company.”
Built in 1969, the San Francisco skyscraper — comprising three buildings totaling 1.8 million square feet — was once the tallest structure in the city. It was named for its tenant, Bank of America, which used the property as its national headquarters until 1998.
Today, the bank occupies nearly 300,000 square feet in a lease that expires in 2035. The property, which was renovated in 2017, is more than 90% leased. Other major tenants include law firm Kirkland & Ellis and financial institutions Goldman Sachs, Dodge & Cox, and UBS Financial Services.
Like other real estate companies that found themselves over-leveraged on office properties after the pandemic, Vornado has been under pressure from investors to shore up its balance sheet, which has been buckling from distressed debt and weak demand for office leasing.
According to loan documents, a $1.2 billion mortgage taken out by the owners of 555 California St. from JPMorgan is set to mature next year.
Vornado’s second-quarter revenue declined about 2% to $441 million, according to its financial statements. Its cash and liquidity balance improved to $1.2 billion from $734 million.
It is not known how much Vornado or Trump would seek for 555 California St.
The largest skyscraper sale in San Francisco this year was $177 million, $238 per square foot.
“We think that 555 California is the single best asset in San Francisco,” Roth said. “San Francisco is in a recovery phase now, which we think is going to be very dramatic.”