Shorenstein Sheds 50% Interest in BofA Center

SAN FRANCISCO-Shorenstein has shed its 50% stake in three-building, 1.8-million-sf Bank of America Center. The news comes just a few weeks after Bank of America closed on the estimated $400-million sale of its 50% interest in the landmark Financial District complex. Pacific Gold Equities LP, the New York investment group led by Mark Karasick and David Werner that bought Bank of America’s stake, now holds Shorenstein’s stake as well. Both transactions are believed to have been similarly valued. Shorenstein says it will continue to act as the property manager and exclusive leasing agent for the property.Both Shorenstein and Pacific Gold’s broker in the transaction, Carlton Advisory Services, were vague about the transaction, with neither using the word “sale” in their announcements or making themselves available for further comment. Based on the announcements and conversations other sources, it appears that Shorenstein was forced to shed its interest due to the passage of the Federal omnibus tax bill on October 11, which somehow reclassified the complex partnership between Shorenstein and Pacific Gold Equities.”The co-ownership arrangement provided for a variety of circumstances in which the co-owners’ interests could be modified in the future,” reads a statement released by Shorenstein. “One of the circumstances was a change in law that could adversely affect one or more of the parties. Shorenstein exercised this provision due to the omnibus federal tax bill.”The upshot is that Bank of America Center is now likely to be owned by several different entities, as sources say Karasick’s group is known for closing the larger deal and then selling off smaller pieces. In line with that theory, Toronto-based IPC US REIT said last month that one of its subsidiaries has made a $51-million, seven-year preferred equity investment in the complex that ultimately will result in its owning a 10.5% interest in the asset.