Brookfield Buy Of $93M Loan Backing San Francisco Office Falls Through

Brookfield walked away from a pending agreement to acquire a $93M loan backed by 101 Mission St. from senior lender ING.

The deal fell apart after Brookfield and ING failed to reach consensus with other lenders, according to the San Francisco Business Times. 

Vanbarton Group bought the property in 2018 for $163.3M but defaulted on its loan in 2024, according to the San Francisco Chronicle. 

Brookfield’s offer would have valued the 21-story tower at half the 2018 price, closer to $80M. Vanbarton will not retain any ownership once ING secures a new buyer. 

ING has been in recent discussions with other potential buyers to take on the debt. The San Francisco Business Times reported that a deal with a specific buyer is in the works but none of the details have been made public. 

ING recently closed the high-profile sale of the loan backing the two towers at Market Center to Flynn Properties for a reported $177M, a substantial 76% discount from its previous purchase price. Flynn Properties plans to revamp the building with a large-scale investment in ground-floor amenities appealing to tenants looking to attract high-end talent. That deal was the largest in the city since 2022. 

Despite the protracted slump since the pandemic, San Francisco’s office market is showing signs of a turnaround. The city saw an increase in leasing activity, with the first quarter being the strongest in five years, according to CBRE. Total vacancy is at 35.4% currently, but the forecast trends are positive as leasing activity continues to pick up. 

Investment sales have also made their way back into the market, with buyers attracted by low prices driven by distress and low occupancy.