Lenders Serve Columbia Property Trust With Default Notice

Columbia Property Trust has been hit with a notice of default tied to San Francisco office buildings six months after the debt matured.

The New York-based firm defaulted on a $1.7 billion commercial mortgage-backed securities loan in July and received the notice of default from its lenders on Dec. 17, the San Francisco Business Times reported. The loan was backed by 650 California Street and 201 California Street in the Financial District and five other office buildings across the country.

The debt has since grown to $1.9 billion, according to the notice. Lenders could pursue foreclosure if Columbia doesn’t rectify the situation and pay back the money owed.

The seven-building portfolio also includes three office buildings in Manhattan, one in Boston and one in New Jersey. Columbia sought to sell debt backed by 201 California this summer; as of this fall, lenders were negotiating with Ridge Capital Investors to sell the debt for $75 million, but no deal has materialized.

Columbia first defaulted on the $1.7 billion loan, originated in late 2021 by a group including Goldman Sachs, Citigroup and Deutsche Bank, in January 2023, a few months before its scheduled maturity. Columbia negotiated an extension of the loan’s maturity to July 2025, with an additional six-month extension option, according to CMBS data cited by the Business Times. The firm did not exercise the extension option or pay off the loan at its maturity.

The seven-building portfolio was appraised at a total of almost $1.3 billion this year, down from nearly $2.3 billion in October 2021. The appraised value of 650 California dropped to $305 million this year from $479 million over the same period. Columbia bought the building in 2014 for $309 million. The 34-story tower was 87 percent occupied as of September 2024, according to the most recent CMBS data available from lenders cited by the Business Times.— Chris Malone Méndez