by Calculated Risk on 7/28/2009 03:24:00 PM

From the SF Gate: S.F. tower's owners will forfeit it to lender (ht John, Jay)

The owners of a premier San Francisco office tower plan to forfeit the property to their lenders, the city's second distressed transaction involving a major commercial building in recent weeks ...

Hines and Sterling American Property decided to transfer their interest in 333 Bush St. to the original financers, following the surprise dissolution of law firm Heller Ehrman in September ... The 118-year-old law firm defaulted on its 250,000-square-foot lease, leaving the nearly 550,000-square-foot property 65 percent vacant.

... Hines and Sterling bought the tower for $281 million in 2007, near the top of the market, when it was 75 percent leased.

The partnership is handing the property to Brookfield Real Estate Finance and Munich Hypo Bank ...
...
More distressed deals are expected. Nearly three-quarters of Class A office buildings downtown sold between 2005 and 2007 ...

Probably another half off sale (or worse) coming up. It is amazing that 75% of downtown San Francisco Class A office building were sold between 2005 and 2007.

Walking away in the City by the Bay will become common. At least it's a nice place to take a walk ...