Paramount Group, Inc. (NYSE: PGRE) (Paramount or the Company) today announced that it has completed the previously announced acquisition of 111 Sutter Street. Simultaneously with closing, Paramount brought in a joint venture partner to acquire 51% of the equity interest. Paramount will retain the remaining 49% equity interest and manage and lease the asset. The purchase price was $227.0 million, or approximately $775 per square foot. In connection with the acquisition, the joint venture completed a $138.2 million financing of the property. The four-year loan is interest only at LIBOR plus 215 basis points and has three one-year extension options.
We plan to leverage our position as one of San Franciscos largest landlords to meaningfully increase the buildings net operating income, stated Albert Behler, Chairman, Chief Executive Officer and President. In addition to the existing vacancy, approximately 50% of the currently occupied office space is scheduled to expire through 2021, providing us a tremendous opportunity to create value for our shareholders as we proactively manage and lease the asset.
111 Sutter Street is a 293,000 square foot historic, architecturally significant office building located in San Franciscos North Financial District, just one block off of San Franciscos Market Street corridor. The 22-story property is located at the northeast corner of Montgomery and Sutter Streets and is approximately 70% leased primarily to technology, media, business services and not-for-profit tenants. The property offers 12-foot slab-to-slab exposed concrete ceilings allowing abundant natural light into tenant spaces, ideally positioning the property to appeal to todays modern and diverse tenant base. In addition, the property provides tenants direct access to a vibrant array of restaurants, retailers and multiple public transit options. The property is LEED Gold certified and boasts an Energy Star rating of 96.
About Paramount Group, Inc.
Headquartered in New York City, Paramount Group, Inc. is a fully-integrated real estate investment trust that owns, operates, manages, acquires and redevelops high-quality, Class A office properties located in select central business district submarkets of New York City, Washington, D.C. and San Francisco. Paramount is focused on maximizing the value of its portfolio by leveraging the sought-after locations of its assets and its proven property management capabilities to attract and retain high-quality tenants.
Executive Vice President, Chief Financial Officer
Director, Business Development & Investor Relations