Presidio Bay Ventures has given a site approved for two five-story office buildings in San Francisco’s South of Market to its lender, after seeking a three-year extension on the loan.
An affiliate of the locally based developer led by Cyrus Sanandaji has signed a deed in lieu of foreclosure for the half-acre property at 130 Townsend Street and 50 Stanford Street, two blocks from South Beach Harbor, the San Francisco Business Times reported.
The affiliate, 130 Townsend Property Owner, a limited liability company run by Seattle-based Columbia Pacific, surrendered a century-old commercial building and parking lot next door to lender TDA Investment Group, based in San Mateo.
The move came after news that Presidio Bay had sought a three-year extension of the project.
TDA will work with Presidio Bay Ventures to advance an entitled, two-building office campus, the pair said in a joint statement.
Presidio Bay bought the site in July 2019 for $24 million. The office project, dubbed Ampersand, was approved in 2021, but stalled. Plans call for an adaptive reuse and addition to the historic brick building, plus a new building next door.
TDA loaned Presidio $15.5 million in 2019 for pre-development. The debt, which matured last fall, was nearly $16.5 million as of May 15.
Meanwhile, Presidio Bay secured approval in 2021 for a two-building, 83,700-square-foot project containing offices, 1,700 square feet of ground-floor shops and restaurants and 700 square feet for light industrial use.
TDA and Presidio said they would “work cooperatively to advance the development as envisioned.” TDA “believes strongly that San Francisco will continue to be a pre-eminent location for ground-breaking companies.”
TDA is a lender and a real estate investor, which may explain its project involvement, unlike other Bay Area lenders who have sought to sell properties and troubled loans.
The firm did not respond to questions by the Business Times about the project’s timeline.
Plans call for topping a one-story building once known as the Inglenook Vineyard Agency with a four-story addition. The project would result in a five-story, 36,500-square-foot office building at 130 Townsend, with ground-floor shops and restaurants.
The other half of the project, designed by locally based Stanton Architecture, would replace a parking lot with a five-story, 47,200-square-foot office building at 50 Stanford.
The site surrender by Presidio Bay follows a $91 million bet by Sanandaji on Downtown San Francisco.
The founder of Presidio Bay bought an 11-story, 56-year-old office building at 60 Spear Street in the south Financial District for $40.9 million — 62 percent less than it traded for a decade earlier. He plans to pour in another $50 million to create “the country’s first office resort.”
But while Presidio Bay acquired 60 Spear for $260 per square foot, it bought the 130 Townsend and 50 Stanford Street sites at pre-pandemic pricing. That may have proved too high to keep the site, especially once the loan by TDA matured, according to the Business Times.
— Dana Bartholomew
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