Mack Real Estate Pursues Loan Sale at Battery Street Building

Mack Real Estate Group is looking for a buyer for debt tied to a downtown San Francisco office building.

The New York-based firm has tapped CBRE to market a nonperforming $100 million loan backed by 301 Battery Street, the San Francisco Business Times reported.

An exact price for the debt has not been disclosed, but one source familiar with the matter told the Business Times that the lender is hoping to sell the Financial District building for approximately $90 million. That number would place the per-square-foot value of the 208,000-square-foot structure in the low- to mid-$400 range. Mack Real Estate’s lending arm originated the loan for owner RFR when it acquired 301 Battery in February 2020 for $143 million.

A buyer who acquires the nonperforming debt could then take ownership of 301 Battery either by pursuing foreclosure or negotiating with RFR for a deed-in-lieu deal. RFR could also reach an agreement with Mack to retain ownership of the property, which housed the Federal Reserve Bank of San Francisco, also known as The Reserve, for six decades.

RFR acquired the building immediately before the Covid-19 pandemic brought San Francisco’s burgeoning office market to its knees. At one point, RFR reportedly considered adding amenities to the building such as a pickleball court in hopes of attracting new tenants. The plans never came to fruition and tenants have been vacating the building in recent years, according to the Business Times.

Demand for offices across San Francisco has since rebounded to pre-pandemic levels as the artificial intelligence boom continues to gobble up office space in the city and throughout the Bay Area. Still, some buildings have been slow to fill back up, leading to debt sales such as Mack’s at 301 Battery. In January, lenders started the process of selling a $350 million nonperforming loan tied to 225 Bush Street after owner Kylli stopped making loan payments in December 2024. Last year, San Francisco Examiner owner Clint Reilly listed a $62.3 million loan tied to the 235 Pine Street office building for sale.

— Chris Malone Méndez