The question of who would acquire a nonperforming loan backed by Vanbarton Group’s 101 Mission Street has been answered.
Elliott Investment Management, in partnership with San Francisco-based firm Probis, has bought the debt tied to the Financial District office building, the San Francisco Business Times reported. The Florida-based investor has purchased for a nearly $93.2 million loan backed by the building, though the exact amount Elliott paid to acquire the debt from senior lender ING was not clear. Elliott is believed to have spent more than $400 per square foot for the debt tied to the 210,000-square-foot building, amounting to the mid-$80 million range.
New York-based Vanbarton acquired the 21-story building for about $168.3 million in 2018. Elliott could possibly grab the building through a traditional foreclosure or a deed in lieu of foreclosure.
Brookfield Properties was in talks to buy the debt linked to 101 Mission Street in the spring. An affiliate of the New York-based company originated a mezzanine loan for Vanbarton’s 2018 purchase of the building. But Brookfield and ING couldn’t come to an agreement with its lender partners about how to proceed. The disagreements ultimately ended up killing the deal.
The San Francisco office market is still struggling to bounce back from its pandemic slump. As companies implement return-to-office mandates, however, the city is no longer in last place nationwide.
In the second quarter, office vacancy in the city was at 34.8 percent, according to a report from CBRE. In the same quarter the previous year, it was approximately 31.8 percent, Cresa reported.
The 101 Mission Street property was approximately 80 percent occupied as of earlier this year, according to the Business Times.
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