Short sale of SF office building likely to yield 60% loss from prior trade

UPDATED OCT. 25 at 3:30 p.m.:

Another Downtown San Francisco office tower — this one at 115 Sansome Street — appears likely to change hands at a huge discount. 

Located in the North Financial District, the property has no official listing price but the guidance is between $25 million and $30 million, according to a source with knowledge of the offering. 

Even if the 14-story 1915 Beaux Arts building sells at $30 million, or about $230 per square foot, that would be 60 percent off the last sale price and about half of its loan amount. 

Vanbarton Group, which has offices in New York and San Francisco, bought the building for $83 million in 2016 and put it on the market for more than $100 million in 2018. It didn’t sell at the time and the company refinanced its 2016 Bank of America loan of around $54 million in 2019, bringing the total up to $65 million, according to loan documents. 

It is unclear how much of the principal remains on the loan. Bank of America did not reply to a request for comment. Vanbarton declined to comment, as did JLL, the brokerage firm marketing the cooperative short sale for the bank and owner.

The bank “understands value and is prepared to take a loss on their loan,” according to the source, citing other recent office deals at similar price points. The source added that interest in the building has been both “extremely strong” and “diverse,” including local, national and international buyers, high-net worth individuals and institutions.

On X, formerly known as Twitter, Roger Fields of Peninsula Land and Capital said that the building had received 23 offers and would likely sell in the $275 per square foot range. Peninsula Land and Capital bought 550 California Street in early September at about $40.5 million, or $120 per square foot.

That would represent a price of $35.9 million, a 57 percent discount from its previous sale.

“There is significant interest in acquiring well-priced San Francisco office buildings,” Fields posted.

A source with knowledge of the market said that 550 California would likely end up being the lowest price per square foot trade in the Financial District during this downcycle. 350 California Street also sold recently for $61 million, or a little over $200 per square foot and 60 Spear Street changed hands for $41 million, or about $260 per square foot.

Derek Daniels, research director for Colliers, said that the enthusiasm surrounding 115 Sansome is “indicative that activity and interest from buyers is picking up pace.”

Daniels said via email: “The resetting has begun.” 

Addition: Previous story did not include information from Roger Fields of Peninsula Land and Capital.

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