Chehebar Family Loses Union Square Properties

New York’s Chehebar family has lost its remaining holdings in San Francisco’s Union Square due to loan defaults.

The family’s Jackson Group real estate firm is no longer the owner of retail properties in the neighborhood as the last two properties under its name go through foreclosure proceedings, the San Francisco Business Times reported.

The Chehebars, real estate investors and founders of the Rainbow Shops clothing chain, bought the first two retail floors of the Grace Building at 166 Geary Street and a separate three-story building at 46-52 Geary Street for a combined $67.8 million in 2014 and 2015, respectively, according to the Business Times.

Last month, the three-story building at 46-52 Geary Street was awarded to the Jackson Group’s lender, Citigroup Global Markets Realty Corporation, after the lender had a winning bid of $4.8 million at a foreclosure auction. The Jackson Group acquired the building in 2015 for $21.8 million; the following year, the firm took out a loan from Citigroup guaranteed by the property for $12.7 million.

When the Jackson Group was served a default notice last June for the property, it was $258,000 behind in payments on that loan. By the time the foreclosure auction rolled around, the total debt, penalties and fees associated with the debt was $14.4 million.

Back in 2022, the Jackson Group lost the bottom two retail floors of the Grace Building after defaulting on a $28.5 million loan. It went into receivership shortly thereafter.

The Jackson Group originally bought the 12,907-square-foot property at the Grace Building in 2014 for $46 million. The first two floors fell 62 percent in value from an appraised estimate of $46 million in 2016 to $17.3 million in 2024, according to the Business Times. The only remaining retail tenant is Suit Supply after Jimmy Choo and La Perla left.

The Grace Building retail property is scheduled for foreclosure auction on Aug. 21. — Chris Malone Méndez