Axonic Capital LLC on Tuesday announced the closing of a $50-million senior loan to refinance the historic Merchants Exchange Building, a 245,000-square-foot office property located at 465 California St. in San Francisco’s Financial District. The three-year floating-rate loan carries two one-year extension options and allows the project’s sponsor, The Clint Reilly Organization, to refinance existing senior debt while positioning the asset to benefit from improving leasing fundamentals.
“We see that certain gateway markets continue to experience recovery, and Axonic is selectively increasing our office exposure where we believe tenant demand is rebounding and the rejuvenation of legacy assets creates upside potential for future leasing,” said Erik Nygaard, principal and portfolio manager at Axonic. “San Francisco is showing clear signs of stabilization, particularly among smaller and mid-sized tenants seeking quality space in prime locations like the Merchants Exchange Building.”
Affinius Capital, with whom Axonic recently launched a strategic partnership for construction lending, remained in the capital stack as the incumbent mezzanine lender.
Northmarq arranged the transaction on behalf of the borrower. Additional terms were not disclosed.
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