Square Mile Provides $136M Loan for San Fran Office Property Duo

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Square Mile Capital Management has provided $136.4 million in financing to Clint Reilly Organization for its acquisition of 235 Pine Street and refinance of 535 Pacific Avenue in San Francisco, Calif., the lender announced yesterday.

The debt, which comprises a senior and mezzanine loan, is cross-collateralized by the two office buildings. The senior/mezz breakdown couldn’t immediately be gleaned.

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The San Francisco-based borrower, headed by real estate magnate Clint Reilly, acquired 235 Pine Street earlier this month from CBRE Global Investors—paying $129 million for the 161,380-square-foot property, according to Biz Journals San Francisco—and has owned 535 Pacific Avenue since 1992. In addition to financing the Pine Street acquisition and paying down existing debt on Pacific Avenue, proceeds from Square Mile’s loan will be used to fund future leasing and capital expenditure costs for both properties.

“235 Pine and 535 Pacific have both benefited from high-quality ownership and significant capital investment over the past few years, as evidenced through the momentum and quality of recent leasing activity,” Michael Mestel, a principal at Square Mile, said in prepared remarks. “We believe that these well-located, first-class assets will be well positioned for continued success. Overall, we believe that the positive demographic trends and robust market fundamentals will continue to sustain San Francisco’s office market. We are excited to continue our relationship with the outstanding Clinton Reilly Organization on this transaction.”

Erected in 1990 and renovated by CBRE in 2016, 235 Pine Street is a 25-story, Class-A building located in San Francisco’s financial district. It is more than 90 percent leased to a variety of tenants and its amenities include a state-of-the-art business center, bike racks and locker rooms. CBRE purchased the property for $89 million in 2014, according to The Registry.

535 Pacific Avenue is a 35,401-square-foot, 4-story boutique office building located in the Jackson Square submarket of San Francisco. Constructed in 1907, it was most recently modernized in 2015 with significant capital improvements. The property is currently 95 percent leased, and has been for the past few years, according to Square Mile’s announcement.

Officials at Clint Reilly Organization did not immediately return a request for comment.