Shorenstein Properties Sells Distressed Office Tower

The recent debt-swamped sale of 45 Fremont Street marks the end of a half‑century chapter for one of San Francisco’s most recognizable office towers and underscores the city’s broader market reckoning.

Built in 1978 and long held by Shorenstein Properties, the 34‑story building was surrendered in early 2026 to Madison Capital, which acquired the distressed debt for $238 million after the property fell into default, The San Francisco Standard reported. For decades, 45 Fremont was a cornerstone of the Shorenstein family’s downtown portfolio, housing vintage San Francisco tenants such as Bechtel Corporation, Wells Fargo and Gensler.

Fortunes shifted after the pandemic, when remote work gutted office demand and the building’s largest lease — 205,000 square feet to Slack — collapsed following Salesforce’s $27.7 billion acquisition of the company in 2021. The resulting vacancy left Shorenstein and its partner Blackstone, which held a 49 percent stake, unable to service a $347 million loan, leading to a deed‑in‑lieu of foreclosure that transferred ownership without litigation. Wells Fargo exited the next year, and the following year Gensler left.

The unraveling at 45 Fremont came as Shorenstein fought to stabilize other assets, including the Twitter building in Mid‑Market, where it refinanced a $400 million loan with JPMorgan in 2023. That deal bought time for one property but left Fremont’s other assets exposed to a declining market as office demand shrunk and interest rates surged.

The tower’s website now reads simply, “Building reintroduction coming soon,” signaling Madison Capital’s intent to reposition the building in a market with record vacancies and declining valuations.

Madison Capital’s acquisition fits a pattern of opportunistic buying in San Francisco’s distressed office sector. The New York firm has recently picked up 123 Mission Street, 600 Battery Street and the Crocker Galleria, assembling a portfolio of discounted downtown properties. Analysts view these trades as early steps in a long‑term reset, where deep‑pocketed investors are betting on eventual recovery through recapitalization and adaptive reuse.

Shorenstein developed 45 Fremont in 1978 and had owned it ever since.

– Joel Russell