Axonic Capital has closed a $50 million senior loan to refinance the historic Merchants Exchange Building, a 245,000-square-foot office property located at 465 California Street in San Francisco’s Financial District.
The three-year floating-rate loan includes two one-year extension options and allows the building’s sponsor, The Clint Reilly Organization, to refinance existing senior debt while continuing to capitalize on leasing momentum and the broader recovery in the city’s office market.
Originally built in 1903, the 16-story Merchants Exchange Building is more than 80% leased to approximately 40 tenants spanning government agencies, law firms, financial services firms, technology companies, and international consulates. The property also includes notable event spaces such as the Julia Morgan Ballroom and the Merchants Exchange Club.
Affinius Capital, which recently partnered with Axonic for construction lending, remained in the capital stack as the incumbent mezzanine lender. Northmarq arranged the transaction on behalf of the borrower. Additional financial terms were not disclosed.
Founded in 2010 and based in New York, Axonic Capital manages approximately $8 billion in assets, with a focus on structured credit, real estate debt and equity, and systematic fixed income strategies.
KEY QUOTE:
“We see that certain gateway markets continue to experience recovery, and Axonic is selectively increasing our office exposure where we believe tenant demand is rebounding and the rejuvenation of legacy assets creates upside potential for future leasing. San Francisco is showing clear signs of stabilization, particularly among smaller and mid-sized tenants seeking quality space in prime locations like the Merchants Exchange Building. Our financing reflects our commitment to supporting the asset through stabilization and our conviction in both the sponsorship and the building’s long-term fundamentals.”
Erik Nygaard, Principal And Portfolio Manager At Axonic Capital LLC
