Jackson Square Property Heads to Foreclosure Auction

An upcoming foreclosure auction could throw some shade on Jackson Square’s reputation as a bright spot amid the ongoing struggles of much of the rest of downtown San Francisco’s commercial real estate market.

Bidding for 244 Jackson Street was slated for May 8 after its father-and-son ownership fell into default on a $13.6 million loan, the San Francisco Business Times reported.

Moris and David Herscowitz own the four-story, 30,000-square-foot property through Roth Jackson LLC, which saw its loan mature in July 2024 and a deal for a sale fell through a few months later.

Jackson Square has seen several high-priced deals in recent months along with a significant vote of confidence in the form of Related California’s plans for a 41-story office-hotel tower.

Helping spur interest in Jackson Square has been Michael Shvo’s high-profile renovation and repositioning of the Transamerica Pyramid, which sits between Jackson Square and San Francisco’s famed Embarcadero.

The pending auction for the completely vacant 244 Jackson points the other way, with the Herscowitzes now set to let it go seven years after spending $33 million for the property.

The $13.6 million loan against the building — an obligation that has scaled to $15 million or so over recent months — was taken when it was 100 percent occupied and valued at $21.3 million. An appraiser pegged the building’s value at $13.3 million as recently as last year.

Neither the Herscowitzes nor representatives for JLL, the brokerage they retained to sell the property last year, responded to inquiries from the Business Times.

The lenders on the property, represented by M&T Bank’s Wilmington Trust, served Roth Jackson LLC with a default notice in December.

The lender could acquire the building with a credit bid if no bidders get close to the amount owed.

The auction is currently scheduled for 1:30 p.m. on May 8.

— Jerry Sullivan