BofA May Sell Stake in Namesake High Rise

SAN FRANCISCO-Bank of America is considering the sale of its 50% stake in its namesake Downtown high rise as part of a re-capitalization of its 50-50 partnership in the 1.8-million-sf asset with Shorenstein Co. that definitely will include a refinancing of the debt on the property.BofA spokesman Harvey Radin acknowledged that a sale is one of the options being considered, but that the bank ultimately could decide to simply retain its stake and be satisfied with the refinancing. A source close to Shorenstein says the company is not currently looking to sell its stake in the development, but acknowledged that a re-capitalization was in the works that might ultimately result in a new partner and will definitely result in a refinancing.Local brokers tell GlobeSt.com that decision will like hinge on how much money would-be buyers offer for the bank’s stake. Estimates on the potential value of the building vary wildly–from $375 per sf to nearly $600 per sf–but most are putting the value somewhere between $400 and $500 per sf. The low side would account for current market conditions, over-market rents that will evaporate and the building’s 18% current vacancy rate. The high side would account for a thirst for institutional quality real estate assets that could bring a bidding war.BofA and co-owner Shorenstein Co. tried to sell the tower in late 2000 at the height of the dot-com real estate boom but the property was never tied up. At that time, estimates were that the building could sell for between $800 million and $1 billion, which equates to between $444 and $555 per sf. Since that time, the market has been moving steeply downward, with annualized rents sliding from a high of $80 per sf into the $30s on average and premier product like BofA Center holding commanding rents closer to $40 per sf.