San Francisco Media Mogul Seeks Office Debt Buyer

San Francisco Examiner owner Clint Reilly is determined to keep his company’s 235 Pine Street in the Financial District, even if that requires finding someone else to make loan payments.

The media mogul, along with JLL, is searching for a buyer for $62.3 million of debt tied to the building, the San Francisco Business Times reported. The loan was backed by the 25-story, 163,000-square-foot downtown office building.

“I have no intention of selling this building, or letting anyone else own it,” Reilly told the Business Times of the debt sale. “The issues around all of these office buildings that are going back to lenders — that is not what is happening here. They’re selling the loan at a discount so they can get out of town.”

Reilly was purportedly caught off guard when JLL listed the debt for sale. He bought the building in 2018 from CBRE Global Investors for $129 million and is willing to pay whatever price to keep it under his stewardship. That would include either his company, the Clint Reilly Organization, pursuing acquisition of the debt or, if another buyer for the loan is chosen, paying off the new buyer when the loan matures next July.

Affinius Capital originated a $105.7 million loan for Reilly on the property in 2018 before assigning the debt to American Home Assurance Lending Company, an affiliate of American International Group. JLL noted in marketing materials that 235 Pine Street is 74 percent occupied by 23 different tenants. Reilly told the Business Times that his company has never missed a monthly payment on the debt tied to the office building.

“Nobody’s taking my building back. And given the amount of professionalism with which we have dealt with them, the amount of money we have paid them back, I would have expected a more professional approach,” Reilly said of the lender.

The situation and possible outcome at 235 Pine Street mirrors Flynn Properties’ $177 million takeover of Market Center earlier this month. That purchase — the largest post-pandemic office transaction in San Francisco to date — involved the company acquiring a loan backed by the complex before buying the building itself from Paramount Group.

Office vacancy in San Francisco remains high, with CBRE estimating first-quarter office vacancy in the city at 36.6 percent.

— Chris Malone Méndez