San Francisco’s beleaguered office property market received a boost of activity – albeit of a discounted nature – with the acquisition of the Market Center complex by restaurant franchise magnate Greg Flynn and the investment firm DRA Advisors.
The property, which consists of adjacent 22-story and 40-story towers on Market Street, were 44% leased as of April. According to a Bloomberg report, the off-market acquisition involved the new owners paying roughly $177 million to take over the property’s distressed $417 million mortgage. The transaction is the largest of its kind since 2022, according to brokerage CBRE Group Inc.
Still, the transaction marked a significant discount for Market Center, which Paramount Group Inc. and a partner purchased from Blackstone Inc. for in 2019 for $722 million. Paramount ceased making mortgage payments in 2024 and defaulted on the loan in January.
“We are buying it at a price that allows us to invest heavily to take it from good to really great,” said Flynn, adding that he planned to upgrade the complex with new features including an activity center with a full-sized basketball court and climbing wall plus a gym, pickleball courts and a golf suite. “San Francisco has never seen anything like this – New York is way ahead of San Francisco in amenities.”
Photo: Minesweeper / Wikimedia Commons
Amazing!! What a steal.