WeWork Takes Over Union Bank Bldg. in Largest San Francisco Deal This Year
Collaborative Workplace Provider Signs 18-Year Lease with Kennedy Wilson and Takenaka Corp., Will Open Largest Location in the City at 430 California
After completing a pair of deals to expand its operations on the East Coast, New York City-based WeWork finalized negotiations with Kennedy Wilson (NYSE: KW) and Takenaka Corp. to take over the MUFG Union Bank Building in a deal that registers as the largest office lease signed in San Francisco this year.
The collaborative workplace provider, which earlier this month signed a pair of leases to expand its footprint in Washington, D.C. and Atlanta, will be the sole tenant at 430 California after agreeing to take all 20 floors at the historic downtown high-rise. The 251,722-square-foot lease has an 18-year term, with WeWork scheduled to start its initial move-in in the first quarter of 2019.
KW and Takenaka partnered up for the first time in December 2016 to acquire the Union Bank tower and landmark bank branch, located at 400 California, from Union Bank parent company, MUFG Americas Holdings Corp. (NYSE: MTU). As part of those negotiations, MUFG Union Bank entered into a sale-leaseback that would see the Bank of Tokyo-Mitsubishi UFJ subsidiary vacate the property in phases over the next two years.
As MUFG Union Bank commenced its move-out, KW and Takenaka initiated a multi-million dollar renovation of the property that included upgrades to the lobby and enhanced building amenities. With the venture's new deal, 430 California will now be home to the largest WeWork office in San Francisco.
“We are proud to execute this substantial lease so quickly and to stabilize the property with a top-tier company nearly two years ahead of our initial business plan,” said William Morrow, chairman and CEO of KW.
CBRE handled both sides of the deal. Allen Matkins Leck Gamble Mallory & Natsis LLP served in an advisory role for Kennedy Wilson and Takenaka Corp., while Abram Roy LLP provided additional counsel to WeWork.