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Axonic Capital LLC has provided a $50 million senior loan to refinance the Merchants Exchange Building, a historic 245,000-square-foot office tower at 465 California St. in San Francisco’s Financial District. The new financing allows the sponsor, The Clint Reilly Organization, to retire existing senior debt on the downtown property while positioning the asset to capture demand as leasing conditions improve.
The senior mortgage is structured as a three-year floating-rate loan with two one-year extension options, giving the sponsor flexibility to execute its business plan over a potential five-year term. Axonic described the refinancing as part of a targeted effort to increase its exposure to select office assets where it sees tenant demand normalizing and opportunities to enhance performance through asset rejuvenation.
Erik Nygaard, principal and portfolio manager at Axonic, said the firm is seeing signs of recovery in certain gateway markets and is selectively adding to its office portfolio in locations where leasing momentum is returning. He noted that San Francisco is showing stabilization, particularly from smaller and mid-sized tenants seeking high-quality space in prime locations, and cited the Merchants Exchange Building as an example of an asset positioned to benefit from that trend.
Affinius Capital remains in the capital stack as the incumbent mezzanine lender. The firm recently launched a strategic partnership with Axonic focused on construction lending, underscoring the broader relationship between the two capital providers even as this particular transaction centers on refinancing an existing office property.
Northmarq arranged the refinancing on behalf of the borrower, coordinating the execution between Axonic as senior lender and Affinius as mezzanine lender. Beyond the headline loan amount, term and structure, the parties did not disclose additional financial terms for the transaction.
The post Axonic Capital Provides $50M Refinance Loan for San Francisco Merchants Exchange Building appeared first on CRE Market Beat.
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