REPORT: Presidio Bay Lined Up To Buy Debt On San Francisco Fed Building

San Francisco developer Presidio Bay Ventures is targeting the debt on a historic building on Battery Street, the San Francisco Business Times reported, citing sources familiar with the potential deal.

Mack Real Estate of New York City is seeking buyers for a $100M nonperforming loan backed by the former Federal Reserve Bank of San Francisco Building at 301 Battery St.

The deal to acquire the loan on the 208K SF, seven-story building would likely be in the $70M range, and Presidio Bay would likely assume control of the building through foreclosure rather than working with owner RFR on a deed-in-lieu-of-foreclosure agreement, the SFBT reported.

Presidio Bay is partnering with longtime San Francisco entrepreneur Phil Spiegel to develop a new hospitality concept for the historic building constructed in 1924, the SFBT reported.

New York City-based RFR purchased the seven-story building in 2020 for $143M and repositioned it as creative offices and event space.

Mack Real Estate’s commercial lending and debt investment arm funded the acquisition of 301 Battery St. for $143M in February 2020, just before the pandemic emptied San Francisco’s Financial District office towers.

Presidio Bay has an extensive portfolio of commercial properties throughout the Bay Area. One of its flagship properties is The Spear at the corner of Spear and Mission streets. The 13-story, 184K SF office tower is undergoing a $100M renovation to create an office resort concept and is expected to come online in the fourth quarter.

A spate of leasing from artificial intelligence companies is driving an office resurgence, but properties in San Francisco and the rest of the Bay Area are still changing hands at steeply discounted prices.