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MetLife Pays $260M for Full Deed to 425 Market

SAN FRANCISCO-MetLife, owner of the lower third of the 38-story building, acquires the top two-thirds, effectively folding the condominium ownership into a single entity.

By Brian K. Miller | Updated on December 14, 2006

SAN FRANCISCO-For upward of $260 million, private equity firm Walton Street Capital has sold the top two-thirds of 425 Market St. to insurer MetLife, which already owned the lower third of the 905,000-sf, 38-story building in the Financial District. Chicago-based Walton Street acquired its stake in 2004 from Shorenstein, IBM and Fremont Properties for about $160 million, local sources tell GlobeSt.com.

Prior to the sale, MetLife owned floors 4-15 and Walton Street owned floors 16-36 plus the third floor. The two also held a pro-rata interest in the “common areas,” which included the retail, storage, second floor and parking. The $440-per-sf purchase price is at the top end of recent comparable sales but well below replacement cost, which local sources put at between $550 and $600 per sf including land costs. The initial yield on the investment is in the 4% range, according to local sources.

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