The former headquarters of Zendesk is now under lender control.
Lenders have seized ownership of the 77,225-square-foot 1019 Market Street building at a foreclosure auction, the San Francisco Business Times reported. The unnamed entities placed the winning bid at $10.3 million after the borrower stopped making payments on a $33.5 million loan backed by the property.
Prior to the lenders’ purchase, the previous owner was 1019 Market Street LP, reported to be an affiliate of an investment fund managed by Deutsche Bank, according to the Business Times. The ownership bought the property for $48.3 million, or $625 per square foot. A Morningstar appraisal in August placed the building’s value at $14.7 million — a notable fall from its appraisal price of $71.4 million in 2019, according to Cred IQ data cited by the Business Times.
The trustee, Chicago Title Company, filed a notice of mortgage default in April on behalf of the lenders. The following month, lenders alleged in a lawsuit that the building owner stopped making its monthly payment on the $33.5 million loan linked to the building in February. The owner was identified as Deutsche asset management arm DWS. A month later, Chris Neilson of Trigild was appointed the building’s receiver.
Zendesk signed its lease for the 1019 Market building in 2013, a year before 1019 Market Street LP affiliate bought the building. In 2021, Zendesk paid $7 million to terminate its lease. The company exited the building in 2022 and planted its flag at 181 Fremont Street; the 1019 Market building has been vacant ever since, aside from a retail tenant in a small ground-floor commercial space.
How the lenders proceed with the Mid-Market building after the purchase at foreclosure auction remains to be seen. They could move to sell the building to a new buyer at a lower price than was available to previous ownership. In doing that, a future owner would have more flexibility as to how to deal with and invest in the building.
— Chris Malone Méndez
Read more
Zendesk poised to sublease 40K sf from Meta in San Francisco
Former Zendesk HQ in SF’s Mid-Market headed to foreclosure auction
Zendesk becomes latest tech firm to leave SF’s Mid-Market
Copyright for syndicated content belongs to the linked Source link
