Originally completed in 1902 at 116 New Montgomery St. in the South Financial District, the Rialto Building has eight stories of office space above street-level and mezzanine retail space. The property is 88% occupied by tenants including Trust for Public Land, Walgreens and Chipotle Grill.
Wilemon and director Zane Sweet (HFF San Francisco) worked on behalf of Steven Firtel, corporate counsel and director of development for Bomel. Firtel says the financing "will enable us to implement a long-term leasing and capital improvements plan on the Rialto."
HFF managing director Larry Wilemon says proceeds from the three-year loan also are being used to defease the existing loan on the property and pay off an unsecured note. Bomel intends to hold the property long term, he says.
"The Rialto Building is a tremendous value-add opportunity due to a majority of the leases being below market and expiring within the next six to 36 months," Wilemon says. "In a market that has seen rents increase from $24 per square foot to roughly $40 per square foot for Class B office space, this is a perfect time for the current owners to reposition the building and raise rents to market levels."
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