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Value of WeWork venture’s SF office building shrinks — again
New appraisal on 600 California comes in at $124M, or 52% of its debt
The value of 600 California Street, an office building owned by WeWork Capital Advisors and Rhone Group in San Francisco, has shrunk again, marking the second cut since the duo defaulted on loans tied to the property last year.
In 2019, the building was valued at $349 million.
At the end of last year, it was valued at $183 million.
Now, the 359,000-square-foot building has been appraised at $124 million, a 65 percent cut from its 2019 valuation, according to data from Morningstar Credit Analytics. The new valuation pegs the property at $345 a square foot.
WeWork Capital Advisors and Rhone defaulted on the loans tied to the building last year, after WeWork itself stopped paying rent at the building. WeWork, the coworking firm currently in a Chapter 11 bankruptcy reorganization, owns the majority stake in WeWork Capital Advisors, also known as WeCap. The idea behind WeCap was to invest in office buildings where WeWork could function as an anchor tenant.
WeCap and Rhone held about $240 million in loans on the property — $140 million originally from Goldman Sachs and $100 million from Citi, then packaged into commercial mortgage-backed securities deals, Morningstar data shows. The most recent valuation means the building is worth just over half, or about 52 percent, of its debt.
The CMBS bondholders sued WeCap and Rhone in July, and asked the court to appoint a receiver on the property. Chris Neilsen at Trigild IVL was appointed as receiver in November, court records show.
As a receiver, Neilsen has the power to lease up the property and market it for sale.