A San Francisco office building that fell into loan default is headed to market.
Court-appointed receiver Trigild is working with Newmark to market the 600 California Street building in Chinatown, the San Francisco Business Times reported. It comes more than two years after WeWork Capital Advisors defaulted on a $240 million loan backed by the 359,880-square-foot office building.
The listing price for the building is expected to be in the mid-$300-per-square-foot range, according to the Business Times. That would place the total value of the building in the mid-$120 million ballpark. The property was appraised at $124 million early last year. WeWork Capital Advisors bought the building in the fall of 2019 for $322.8 million, or under $900 per square foot.
WeWork Capital Advisors–a joint venture of the co-working pioneer and New York-based Rhône
Group–defaulted on the $240 million loan in March 2023. At the time, the firm told its lenders it stopped making payments on the debt because WeWork, the coworking space housed in the structure, stopped making payments on its lease for 186,000 square feet in the building. WeWork began leasing space in the building a few years prior, according to the Business Times.
WeWork stopped paying rent at 600 California in March 2023, though it maintains a presence at 600 California. The company filed to assume its lease in the building during bankruptcy proceedings last year, though it shaved down its footprint down to 43,520 square feet, per the Business Times. It also reduced the rent it would pay for the space and cut back the term of its lease, which now expires at the end of 2030.
The 600 California building went into receivership in November 2023. Trigild has been weighing selling the building for more than a year, according to the Business Times. The receiver has purportedly been waiting for the San Francisco office market to improve before listing the property for sale.
As of last month, JLL, which handles leasing at 600 California, was advertising more than 270,000 square feet in the building for lease, per the Business Times. By that metric, the building is roughly 75 percent vacant.
— Chris Malone Méndez
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