Months after Pollock Financial defaulted on a loan tied to a South Beach office building, appraisers have cut the value of the building by 84 percent.
The roughly 32,000-square-foot building at 340 Bryant Street is now valued at $8.2 million, or $131 per square foot, according to Trepp. The property was previously valued at $52 million, or more than $830 a square foot.
Pollock Financial declared it could not pay off $30.7 million across two commercial mortgage-backed securities loans last year, according to Trepp and Morningstar, which both cited servicer commentary provided to CMBS investors. UBS originated the two CMBS loans in 2017.
Pollock did not respond to a request for comment.
The building’s financial issues stem from WeWork — the co-working firm signed a 10-year lease in 2019, but stopped paying rent in December 2020, according to servicer commentary.
A number of landlords have defaulted on buildings once tied to WeWork, as the firm has stopped paying rent, exited leases and shuttered locations amid steep financial losses. Last month, WeWork told its landlords that it would try and negotiate “nearly all” of its leases.
Elsewhere in San Francisco, landlords Kennedy Wilson and Takenada have sued WeWork for allegedly breaching its lease at 430 California Street and owing more than $250 million in unpaid rent.
At 222 Kearny Street, where WeWork leases about 18,000 square feet, GEM Realty Capital’s loan on the property was sent to special servicing in August for “imminent monetary default.”
Rialto Capital Advisors, the special servicer on Pollock Financial’s loan, expects a foreclosure to occur by the end of the month, according to Morningstar.
“The borrower has communicated that they would like to transition title to the lender,” the commentary added.