Ridge Capital Poised to Buy 201 California Debt

The saga over the debt backed by 201 California Street is heading into a new chapter.

Ridge Capital Investors is working to acquire a loan backed by the Financial District property for approximately $75 million, the San Francisco Business Times reported. That price would value the 17-story, 273,333-square-foot building at about $275 per square foot.

If the deal closes, it would end years of questions about the building’s ownership fate. The 201 building is currently owned by Columbia Property Trust, which is looking to offload the property after defaulting on a $1.7 billion mortgage tied to 201 California and six other buildings in 2023.

Columbia secured an extension of the loan’s maturity to July of this year with the additional option to extend the maturity into early next year. The firm opted not to use that additional extension and wasn’t able to pay off the loan. By selling the debt to Ridge Capital, Columbia and its lenders can resolve the dispute without extending the loan further.

Marketing materials for the debt pitched it as “a path to ownership” for the offices. If the deal closes, Columbia could opt to hand over ownership of the building through a deed in lieu of foreclosure.

The building’s valuation collapse helps paint a picture of the troubles at 201 California. It was appraised at $81.5 million in February, down from $218 million in 2021. Columbia bought the property from Beacon Capital Partners in 2019 for $238.9 million. At the time of the 2019 sale, the building was 99 percent leased; when it hit the market this summer, it was just 35 percent leased.

Snapping up distressed San Francisco offices is the name of the game for Ridge Capital. In 2023, the firm bought 180 Howard Street in a $54 million sale-leaseback. Earlier this year, much like what could happen with 201 California, it acquired a loan backed by 33 New Montgomery Street through a similar loan acquisition and deed in lieu of foreclosure process.

— Chris Malone Méndez