Ashkenazy hiccups on $66M loan for empty building in SF’s Union Square

Ashkenazy Acquisitions has missed a payment on a $66 million loan tied to a 17,000-square-foot retail building in Union Square, its second mortgage shortfall in recent months.

The New York-based investor led by Ben Ashkenazy missed a payment on the mortgage for the empty two-story storefront at 1 Stockton Street, the San Francisco Business Times reported.

The delinquency comes three months after an Ashkenazy joint venture defaulted on a $50 million loan linked to the 42,000-square-foot One Union Square, the seven-story location of Bulgari, Moncler and Lacoste at 200-212 Stockton Street and 172-180 Geary Street, according to The Real Deal.

In 2013, Ashkenazy bought the storefront at 1 Stockton Street, then home to an Apple flagship store, for nearly $50 million, or a record $3,000 per square foot. At the same time, the investor bought One Union Square for $110 million, or $2,500 per square foot. The sellers were affiliates of the German fund Deka-Immobilien.

1 Stockton has sat empty since T-Mobile closed its 17,000-square-foot store last year. The wireless firm, based in Bellevue, Wash., holds a lease there through November 2026, according to the latest CMBS report.

The delinquent loan payment for the building appeared in reports for bond investors released this month. The $66 million loan originated from Barclays in 2019 and matures in December 2029.

Ashkenazy blamed the delinquency on missed rent payments by T-Mobile. As for One Union Square, the firm blamed the bankruptcy of WeWork, the co-working company that closed the door on nearly 10,000 square feet of offices at the building.

“In light of the difficult recovery in San Francisco, all landlords are in a difficult situation,” Ashkenazy said in an emailed statement.

“One Stockton will return to good standing as soon as T-Mobile — the asset’s single credit tenant — becomes current on their rent. They are obligated for more than $20 million through the length of their lease.”

Ashkenazy has seen a cascade of mortgage defaults in its portfolio of more than 100 buildings, valued at $12 billion. Ben Ashkenazy is worth $2.6 billion, according to Forbes.

The defaulted loans include one for Harborplace mall in Baltimore; a tax default at the Faneuil Hall Marketplace in Boston, and defaults at the Mazza Gallerie mall and Union Station in Washington, D.C., according to the Business Journal. To name a few, according to The Real Deal.

The firm’s landmark Harborplace mall in Downtown Baltimore, which sat mired in debt, vacancies and accusations of neglect, ended in court-ordered receivership.

— Dana Bartholomew

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