SVP, Distressed Asset Group - Stewart Title Guaranty NCS - Optimist, advocate, and believer in keeping it simple!
San Francisco's commercial real estate market is encountering significant challenges and distress as billions of dollars worth of commercial mortgages are set to mature in 2024. With $3.5 billion in commercial mortgage-backed security debt alone reaching maturity by the year's end, building owners are finding it difficult to refinance loans taken out before the pandemic due to high vacancies and rising interest rates. Major properties like 1 Stockton St. and One Union Square are experiencing delinquent loans and defaults, with some owners considering walking away entirely from their properties, returning the keys to lenders. Buildings that have been sold are being traded at substantial discounts, with some properties being sold for up to 50% less than their previous purchase prices. For instance, real estate developer Clarion Properties faced a $60 million loss on a San Francisco office building purchased for $86 million just five years ago. The shift to remote work in the tech industry has left millions of square feet of office space vacant and unrentable, particularly impacting San Francisco's market, where downtown alone has over 18 million square feet of empty office space. Additionally, retail has been hit hard, with a wave of store closures affecting downtown San Francisco as major brands like T-Mobile close storefronts. As the effects of the pandemic and remote work persist, distressed assets, delinquencies, foreclosures, and fire sales are becoming increasingly common in San Francisco's once-booming commercial real estate market. Stay informed with the latest news and trends in San Francisco commercial real estate. #SanFrancisco #CommercialRealEstate #RealEstateMarketTrends
