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Paramount to buy office complex in San Francisco for $722M

Paramount Group Inc. agreed to acquire Market Center, a two-building class A office complex in San Francisco's South Financial District, for approximately $722.0 million.

The property at 555 Market St. spans 280,000 square feet, and the property at 575 Market St. comprises 473,000 square feet. The transaction is expected to close in the fourth quarter, subject to customary closing conditions. The company expects to bring a joint venture partner into the transaction prior to closing.

According to an earlier report in the San Francisco Business Times, the seller is Blackstone Group Inc., which reportedly acquired the properties in 2016 for $510 million.

Chairman, CEO and President Albert Behler said rents at the property are "well below market" and that Paramount plans to "aggressively manage future rollover" at the property.

At the same time, the company closed the acquisition of a 44% joint venture interest in an office property at 55 Second St. in San Francisco, in a deal that valued the property at approximately $402.0 million.

The company also upsized the existing mortgage loan on the property by an additional $50.0 million to $187.5 million from $137.5 million in connection with the acquisition.