"With the World Trade Center deal falling apart last week, this one is being watched closely," says a spoeksman for 50%-owner Shorenstein, who also tells GlobeSt no announcement will likely be made until a purchase and sale agreement is in hand. The source also tells GlobeSt that the other 50% owner, Bank of America, which has a long-term lease in the building, is the more motivated seller, and that Shorenstein might refinance rather than sell if it doesn't like the price.

"Twenty years ago, it was thought that its better to own buildings because the cost of capital was relatively low, especially for banks," says the Shorenstein source. "But now this sea change is occurring--pushed somewhat by accounting firms preaching shareholder value and economic value--wherein banks and corporations are beginning to be swayed by consultants saying its better to dispose of the asset, lease it back and better employ the excess capital in another part of the business."

Located at the corner California and Montgomery streets in downtown San Francisco, Bank of America Center is comprised of 555 California St., a 1.5-million-sf class A office building built in 1969, and two smaller structures comprising the center's remaining 300,000 sf. It is the largest Class A property to be brought to market in San Francisco since 1998, when Boston Properties sold the 3-million-sf Embarcadero Center for more than $1.2 billion.