BofA, Goldman Sign Leases at Tower Owned by Vornado, Trump

Bank of America Corp. signed a lease for offices at a San Francisco skyscraper owned by Vornado Realty Trust and the Trump Organization.

The Charlotte, North Carolina-based bank is already a tenant at 555 California St., formerly known as the Bank of America Tower, though it has pared back its space over the past decade.

With the agreement, the bank added 10 years to its commitment at the building, bringing it to 2035, Vornado President Michael Franco said on the company’s fourth-quarter earnings call Wednesday. The bank now will consolidate all its San Francisco offices into the space it has at the tower, he said.

A spokesman for Bank of America declined to comment.

The 52-story skyscraper also counts Goldman Sachs Group Inc. and Microsoft Corp. among its tenants. Goldman Sachs renewed its entire 90,000-square-foot lease, Franco said.

San Francisco is on course to have the country’s worst-performing office market this year, with rents and occupancies likely to drop about 22% as more technology companies embrace remote work, according to a report by property-research firm Green Street.

Vornado has “never lost a major tenant” at 555 California St. in its 14-year ownership of the property, Franco said on the call.

The company last year marketed its 70% stake in 555 California St. and a Manhattan tower it owns with the Trump Organization, 1290 Sixth Ave., to no avail. On its November earnings call, Vornado said it was tempering its price goals for the towers, citing investor caution due to the pandemic.

Shortly after, Vornado tabled efforts to sell stakes in the skyscrapers and shifted focus to refinancing the assets, with an eye toward potentially resuming a search for buyers in 2021.

More recently, the company had internal discussions about buying out the Trump Organization’s 30% interest in the buildings, the Wall Street Journal reported this month. Vornado grew concerned that buyers and lenders were shunning the buildings because of former President Donald Trump’s involvement, the newspaper said, citing people familiar with the matter.

Though the towers aren’t branded with the Trump name nor managed by the Trump Organization, they are among the most lucrative assets in the former president’s real estate portfolio, raking in tens of millions in cash flow each year.

Trump is “a very interesting and controversial man,” Vornado Chief Executive Officer Steven Roth said on the call, adding that the partners bought the buildings in 2007, before Trump was a politician. His role is “totally passive,” Roth said.

Any negativity associated with the former president, Roth said, is “not a sufficient issue to be of any trouble to us at all.”

©2021 Bloomberg L.P.

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