Lender Takes San Francisco Building With Credit Bid

A lender has taken control of a four-story building at 244 Jackson Street in San Francisco following a foreclosure auction on July 31.

The lender named JPMBB 2014-C22 Jackson Street LLC, listed in state records with an address at Starwood Capital Group’s Miami office, now owns the 29,700-square-foot property, built in 1913, which currently stands vacant but previously housed office and retail tenants, the San Francisco Business Times reported.

The building’s prior owner, Roth Jackson LLC — controlled by father-and-son partnership Moris and David Herscowitz — acquired the property in 2018 for $33 million, or about $1,100 per square foot. At the time, it was backed by a $13.6 million commercial mortgage-backed securities loan originated by Barclays in 2014. That loan went into default after maturing in June 2024.

Following an attempted sale that fell through earlier this year, the lender stepped in at auction with a credit bid of just under $10 million, substantially below the outstanding debt and associated costs, which totaled more than $16 million.

The lender’s acquisition does not necessarily reflect the property’s market value, as credit bids benefit from existing debt compared to an actual purchase offer. The building’s most recent appraisal in August 2024 valued it at $13.3 million, according to the Business Times.

Since the default, Colliers has served as the court-appointed receiver, effectively managing the property on behalf of the lender. It is expected that the building will soon list for sale.

The Jackson Square market, known for its luxury retail stores, has seen a resurgence lately with interest from both investors and tenants. The neighborhood, located near the iconic Transamerica Pyramid, has recently attracted the artificial intelligence giant OpenAI (which acquired former Apple designer Jony Ive’s startup), furniture company Branch and luxury brands such as Ralph Lauren and Paul Smith, along with Michelin-starred chef Peter Hemsley. The building at 244 Jackson is located between Jackson Square and the city’s Financial District, according to the Business Times.

—Joel Russell