H
ines and the National Pension Service of Korea have paid off a $503 million loan on their 1.7 million-square-foot office campus in San Francisco's Financial District. The investors, who bought the former PG&E headquarters block in 2021 for $800 million, secured the loan from Goldman Sachs, Blackstone, and the Pentagon Federal Credit Union. With the loan now fully paid off, Hines and NPS own the four-building complex outright.

    The duo's ability to pay off the loan is largely due to their deep pockets. The National Pension Service has over $800 billion in assets under management, allowing it to contribute 95% of the equity needed for the purchase. This deal was the largest real estate transaction by square footage in San Francisco's history, spanning a downtown block bounded by Market, Main, Mission, and Beale streets.

    The campus includes a historic office building on Market, an office tower on Beale, and a parking garage on Main. Initially, Hines and NPS planned to redevelop the site with a mix of residential and commercial projects, including a 1-acre park. However, the project stalled due to the pandemic's impact on the office market.

    The recent deal will allow Hines and NPS to move forward with their development plans when they see fit, potentially changing their original proposal. The investors' ability to refinance the loan was complicated by the size of the debt and the stalled project.