Map displays Downtown SF buildings with defaulted loans

Newspaper lists 13 hotels and office complexes that have missed debt payments

Hilton San Francisco Union Square at 333 O'Farrell Street, Parc 55 San Francisco at 55 Cyril Magnin Street and First National Bank at 1 Montgomery Street in San Francisco
Hilton San Francisco Union Square at 333 O'Farrell Street, Parc 55 San Francisco at 55 Cyril Magnin Street and First National Bank at 1 Montgomery Street in San Francisco (Wikipedia/ Dead.rabbit, Wikipedia/Eric in SF, Google Maps)

Call it the real estate walk of shame.

Owners who have defaulted or have walked away from their money-losing hotels and office buildings in San Francisco now appear on an interactive map, as reported by the San Francisco Chronicle.

The new map includes an ominous 13 commercial properties in Downtown that have missed loan payments or are in dire financial straits since the pandemic, according to a Chronicle analysis.

They include five hotels and six emptying office buildings from the Financial District to South of Market to Nob Hill.

Park Hotels and Resorts, based in Virginia, said it will stop making payments on $725 million in debt backed by two of the city’s biggest hotels, Hilton San Francisco Union Square and Parc 55 San Francisco, which both appear on the map. 

In what’s considered close to Ground Zero for city office forfeitures, Redco Development and AEW Capital Management walked away from San Francisco’s historic First National Bank building this spring after failing to make their mortgage payments. The building at 1 Montgomery Street is on the map.

The combined market value of the 13 mapped properties isn’t known, though the city has assessed them for tax purposes at $3.3 billion. 

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The payment lapses, or defaults in some cases, can result in banks and other lenders taking the buildings to recoup their losses. Some upside-down owners hand over the keys and walk away.

That, in turn, can lower the price of the property and those of their financially sound neighbors, according to the Chronicle. 

Combined with remote work, layoffs, departing companies and a growing list of shuttering major retail stores, this can depress the overall value of real estate in Downtown. One out of three offices in the market are now vacant.

The end result is diminishing property and business tax revenue that fund public services. A city estimate said annual tax losses could reach nearly $200 million.

“We’re not even close to the bottom yet,” Ken Rosen, chairman of the UC Berkeley Haas Fisher Center for Real Estate and Urban Economics, told the Chronicle.

— Dana Bartholomew

Read more

Veritas' Yat-Pang Au (Linkedin, Getty)
Residential
San Francisco
Lenders seek to sell $1B in lapsed loans tied to Veritas apartments
Park Hotels' Thomas Baltimore, Hilton San Francisco Union Square (left) and Parc 55 (right)
Commercial
San Francisco
SF’s biggest hotels to stop mortgage payments 
Redco Development's Chris and Jason Freise and AEW Capital Management's Jonathan Martin with 1 Montgomery Street
Commercial
San Francisco
Redco Development, AEW Capital walk away from SF’s First National Bank building
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