Empty S.F. office tower formerly valued at $62M sold for $6.5M
sfchronicle.com
sfchronicle.com
The key thing is that the buyers had already taken on the loan against the building.
Quote :
"The mostly vacant building was auctioned off eight months after Bridgeton Holdings defaulted on a $45 million mortgage loan. The investor bought the tower in 2018 for $62 million, or $685 per square foot.
LNR, a unit of Connecticut-based Starwood Property Trust, had been acting as special servicer for the $45 million loan. The LNR affiliate took over the loan this month from the original lender, Dallas-based LStar Capital.
Bridgeton, which told lenders last summer it would stop payments on the loan, owed more than $47 million by the April 18 auction.
Because it had taken over the loan from LStar, LNR could have simply credited the $6.56 million auction bid against the more than $47 million Bridgeton owed on the building, instead of plunking down cash at auction, according to the Business Times.
"
So really the reduction is vastly less than is stated in the headline.
[1] https://www.costar.com/article/642008108/one-of-st-louis-tal...
It's zoned for mixed use (although the donut shop on the ground floor left years ago and I'm pretty sure that space has been vacant for a few years). It's in between Powell and Civic Center stations. It's a pretty decent location, with some great food and entertainment near by although the fancier restaurants closed ages ago. It's basically across the street from the Golden Gate Theater and the Warfield.
The neighborhood is what it is. IKEA and their new, popular, food hall is less than a block away. Looks like there's some hipster dofus AI incubator right there too.
The building itself just wasn't well maintained. Last I saw you were far more likely to get trapped in the elevator than mugged.
I did go out of my way to describe it as “roughest” and not “worst”. Least compatible with the image of perfection projected by the typical tower-dwelling corpo? :)
In fact I have a lot of fond memories from the mid-2010s of stopping by the weed lounge on Jessie for a Volcano bag and a few floors of Isaac Rebirth on my PSVita any time my afternoon train was significantly delayed. Alas that just closed too for the same reason: https://sfstandard.com/2024/02/02/san-francisco-cannabis-dis...
At California foreclosure auctions, my understanding is the lender will usually bid up to the loan balance or their estimate of what they can sell it for with some marketting and time. That it sold for $6M to the lender tells you that nobody was prepared to make an offer on it given the time constraints, not that the fair market value is $6M. The lender will operate it and prepare it for sale and buyers will be able to take their time to do due dilligence etc, and most likely it will sell for somewhat more than $6M.
The purpose of a foreclosure auction include clearly establishing a change of ownership. If the lender pursued judicial foreclosure and a deficiency judgement, the fair market value will be litigated some time after the sale, and the borrower may need to make up the difference between the loan balance and fair market value.
I’d be extremely happy to have any of those “hard conversion” offices to live. Naysayers should mind their own business and stop believing in nonsense.
This is the kind of stuff that pisses everybody off. The hoi polloi get raked over the coals for college loans while the haut monde blithely skip right past $40 million in debt.
Mortgages aren’t only one among many phyla of dollar-denominated debt, they‘re not even the biggest [1][2]. And fiscal spending can create new money without debt. Debt is the monetary channel’s mechanism.
[1] https://www.statista.com/statistics/274636/combined-sum-of-a...
[2] https://en.m.wikipedia.org/wiki/National_debt_of_the_United_...
Similar to how you can restructure your medical debt, which doesn’t show up on credit reports anymore, while buying a new car on financing. Separate sets of books.
make new entity, sell new bonds with a new proposal on how new people will potentially make money.
(With ground floor for retail businesses that are generally appealing to residents of the building, such as a cafe.)
I get into this debate every time this comes up, but this was my (illegal) first apartment in New York. It was great. It’s prudish tendencies like outlawing apartments with no windows that force folks like me, who would put black-out curtains anyway, to compete for housing with families who do need natural light. All while an office building lies vacant.
Laws around habitability have nothing to do with price. If you want to make the race to the bottom worse, remove habitability requirements and observe actual dystopia.
but unironically; it'd be much safer than the street
I imagine there are plenty of people out there that aren’t aware that windows are for safety and might find out in the worst way possible.
Limits I know are 1/8 of the flat surface you can march on must be openable windows, 1 complete air change per hour (you have a 50m³ room, you must change at least 50m³ of air per hour. There are some tolerance for historic buildings down to 1/12 of the flat surface, below that the accommodation can't be used to live in.
While for offices there is only an natural illumination requirement, and a ventilation NOT necessarily bound to openable windows. I do not know for the rest of the EU.
They are not used for egress in skyscrapers—no ladder goes that high. And commercial buildings have fantastic internal ventilation. (Skyscraper apartment windows often can’t be opened for ventilation anyway, and are not trivially shattered.)
Or maybe I’m wrong! Maybe the reason that we haven’t seen a rash of converted office buildings is that property owners are holding out hope for return to office, and desperately avoiding writing down their properties. That’s pretty plausible too.
I go on the Internet and it's people saying stuff like "Everyone worries about rent these days" and I really don't.
I once spent the night in a windowless hotel room in Xi’an. It freaked me out so I moved hotels the next day.
Anyways, American moral standards prevent us from just giving people window less rooms to live in, it has to be $100k/tiny home that will last only a few years, or something else crazy like that.
On the other hand, it forces people to become better, and most of them do. Social services help and hurt the problem: on the one hand, you won't die quickly if you become addicted to fentanyl, but on the other hand, the lack of immediate harsh consequences can make dipping into drugs appear less risky. On the other hand, in China, where bottoms are non-existent, and social services are very moralistic, if there are any at all, you know doing drugs is pretty much a death sentence. Even becoming a member of the ant tribe won't save you.
I think it's less about the pragmatics of the things you list, and more about the permits.
I could walk into a lot of commercial spaces, including my office and turn it into a code compliant dwelling myself with stuff from Home Depot I can fit in my truck.
I can't get it approved, permitted , by the city of SF, even if I did it by the books.
There are literally people who show up to the permit office with wheelbarrows.
If you want to fix housing in SF, fix the permit office.
I only know that because it tanked a developer from doing the conversion on a downtown SF property last year, and that made hacker News.
>> For example, the Deutsche Bank Building in New York, demolished in 2011, contained about 40,000 tons of structural steel. At that time, scrap steel prices averaged around $200 per ton, yielding an estimated $8 million from steel alone.