Tidewater Capital, part owner of a 16-story landmark office building in San Francisco, has struck a deal to buy out partner Goldman Sachs for what will likely be less than $300 per square foot.
The locally based investor has negotiated to buy the 140,000-square-foot tower at 351 California Street, in the Financial District, the San Francisco Business Times reported, citing unidentified sources. The sale hasn’t closed.
Goldman Sachs and Tidewater had listed the building last fall in the “upper $200-per-square-foot range,” according to a source.
In 2019, Tidewater agreed to serve as operating partner for the affiliate of Goldman Sachs’ merchant banking division that bought the building for $108 million, or $771 per square foot.
It’s not known what Tidewater will pay for the 125-year-old JH Dollar Building, which was 53 percent leased when it hit the market in September.
Three recent deals for buildings at 255, 300 and 350 California Street sold in separate transactions for between $205 and $300 per square foot.
Tidewater and Goldman secured an $84 million loan from Bank of America when they bought the building in 2019, according to property records. It’s not clear whether the bank had pushed Goldman and Tidewater for a distress sale of the property, according to the newspaper.
Tidewater Capital is working both sides of the office market downturn.
The investor recently surrendered an 83,000-square-foot office building in Downtown Oakland to its lender, but later raised a $200 million fund to seek opportunities in the Bay Area market.
Managing Partner Craig Young said it could amount to $1 billion in buying power after factoring in coinvestment equity the firm planned to raise, plus additional leverage. The Tidewater fund would be focused on residential, office and industrial properties.
Last fall, Tidewater bought a three-building, 175,000-square-foot office campus at 920, 930 and 950 De Guigne Drive in Sunnyvale for $65 million. A few months earlier, the firm paid $100.8 million for a seven-building campus on 21 acres nearby.
This year, Goldman Sachs listed an 84,000-square-foot office building at 1045 Sansome Street it had acquired in early 2020 with Lincoln Property, based in Dallas.
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Goldman and Tidewater ready for reset price on SF office building