Jamestown first managed to cut a deal with a lender to keep an historic office building in Downtown San Francisco. And now it’s reached a similar deal to retain another.
The Atlanta-based investor has come to terms with lender Capital One to retain ownership of the 93,000-square-foot retail-office building at 731 Market Street, across from Union Square, the San Francisco Business Times reported.
The deal comes six months after the firm finagled an agreement to keep its 135,500-square-foot Rialto Building at 116 New Montgomery Street. A year ago, Jamestown defaulted on $93.1 million in mortgages linked to both buildings.
This month, Capital One requested its lawsuit against Jamestown seeking to place the building at 731 Market into receivership — and ultimately seize it through foreclosure — be dismissed.
An unidentified spokesperson for Jamestown said in a statement the firm had paid its debt and would keep the building.
In 2015, Jamestown bought the Rialto and the building at 731 Market Street. It paid $111 million, or $820 per square foot, for the now 122-year-old building on New Montgomery. And it paid $65.5 million, or $700 per square foot, for the now 116-year-old building on Market.
Last fall, the Virginia-based bank served a notice of default for a $60.6 million loan tied to the building on New Montgomery. It then sued Jamestown to foreclose on a $32.5 million delinquent loan linked to the building on Market Street, which matured in April last year.
In April, Jamestown and Capital One reached a settlement for undisclosed terms allowing the investor to retain the Rialto. A reconveyance for the property suggested that Jamestown had paid down some or all of the debt.
Early this year, locally based TMG Partners was in talks to buy the building at 731 Market for between $160 and $180 per square foot, according to the Business Times. But the deal fizzled after being held up by complications from Jamestown’s delinquent loan on the property.
Now that Jamestown owns the building, it’s not clear whether the deal with TMG is still in play.
JLL has listed each of the building’s five floors of offices for lease. An empty ground-floor storefront is leased to CVS, which closed its drugstore there in 2022.
Jamestown had $11.6 billion in assets under management as of the end of last year. Its San Francisco properties include Ghirardelli Square and Levi’s Plaza.
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Jamestown cuts deal with lender to keep historic SF office building
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In February, Truist sold a $22.2 million loan backed by a century-old, 40,100-square-foot office building owned by Jamestown at 660 Market Street to New York-based Fortress Investment Group.
Fortress then traded the loan to locally based Long Market Property Partners, which took ownership of the building in June through a deed-in-lieu of foreclosure, according to the Business Times.
— Dana Bartholomew