Tiffany Building/360 Post Street

The Tiffany Building is located in the heart of San Francisco’s iconic Union Square. The Tiffany Flagship store occupies the lower, first and second levels and Class A Office space is located on floors 3-11.

In October of 2009 a fire occurred in the HVAC unit that serves the office portion of the building.  While the fire was small and contained within the HVAC unit, smoke and other products of combustion were spread throughout floors 3-11.

Immediately following the fire, the office and common areas were cleaned. It was rapidly apparent however that this initial cleaning was not sufficient and that many areas including the internal areas of the building’s ductwork, remained impacted by the smoke and other fire materials.

Our goals were to return the building to pre-fire conditions, to ensure safety at all times of occupants and at the end of the project to have the appropriate verifications that the restoration was appropriate and done to the required level.

the decision was made that a second phase of restoration was needed, a prolonged period of negotiation with our insurer ensued.  These negotiations centered on issues such as scope of the Phase 2 work, the appropriate costs and what coverage was available under the existing policy.  Simultaneously with this negotiation we handled two pieces of complex litigation.  The first was a product defect liability lawsuit that we filed against the equipment manufacturer who caused the fire.  This suit was filed to protect our client in the event that any uninsured losses were realized, we had a path to collect these costs through litigation.  The second piece of litigation was the insurer’s subrogation litigation.  We were able to positively resolve both litigations and finalize a nearly two-year negotiation with the insurer and all parties agreed upon a scope of restoration.

The insurer covered the reconstruction of each floor with all new ductwork, restrooms and common areas as well as a new code compliant ceiling and lighting system. In addition, they also covered all costs to move tenants out of their Premises and into swing space located within the building and back again.

We were able to negotiate loss of rent coverage for all vacant and swing spaces during construction so our client experienced no negative impacts on their cash flow. In the end the overall insurance claim was in excess of $30 million. 

During the reconstruction process we managed the activities of the contractor, oversaw the tenant relocations, served as the main point of contact for the legal teams working on the litigation, ensured that the proper testing, clearance and approvals were obtained from the environmental professionals and oversaw the closeout of the project.  Once complete our team led the marketing and eventual disposition of the asset resulting in an extremely positive result for our client.