(Bloomberg)—Vornado Realty Trust has tapped JPMorgan Chase & Co. to refinance debt on a San Francisco office tower it co-owns with Donald Trump, a move that may provide much needed cash to the former president’s business.
Proceeds from the $1.2 billion loan for 555 California St., as well as two adjacent buildings that form a three-property campus, will fund improvements to the assets and return about $617 million to the owners, according to a marketing document obtained by Bloomberg.
The refinancing comes months after several banks tied to Trump said they would no longer work with him in the fallout of the deadly Capitol riot. The ex-president has at least $590 million in debt coming due in the next four years on other properties owned by the Trump Organization, more than half of which is personally guaranteed.
Eric Trump, executive vice president of Trump Organization, declined to comment.
Vornado tried selling two assets it owns with Trump -- 555 California and 1290 Avenue of the Americas in Manhattan -- last year. Trump’s 30% stake in the two towers is his most valuable asset, making up about one-third of his $2.3 billion fortune, according to the Bloomberg Billionaires Index.
Vornado shelved the sales effort, saying on an earnings call it was tempering its price expectations because of investor caution around commercial-property during the pandemic.
Despite the pandemic shuttering offices and turning San Francisco’s financial district into a ghost town for more than a year, Vornado and Trump’s campus of three properties is about more than 90% occupied as of February, according to the marketing materials. The main tenants of the property include Bank of America Corp. and Morgan Stanley.
In February, Vornado’s chief executive officer Steve Roth emphasized Trump’s passive role in the ownership of the two trophy properties.
“His role in the buildings is totally passive,” Roth said on an earnings call. “He’s OK with that and I’m delighted with that.”
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