CMBS Investors Take Total Loss on $48MM Loan as 103,000 SQFT of San Francisco’s 1155 Market Sells for $8MM
Why this matters
Office continues to trade in two distinct markets: trophy assets in walkable submarkets that are leasing at or near record rents, and commodity Class B and C buildings where the basis is still resetting. Underwriting on the latter has moved toward replacement-cost-minus, with credit underwriting now leaning on tenant covenant and remaining lease term rather than mark-to-market expectations. San Francisco continues to clear office at the deepest discounts to 2019 basis seen in the cycle, while multifamily fundamentals have stabilized and life sciences in the Peninsula remains active. For LP-positioned capital, the read-through is that the bifurcation is now a structural feature of the sector, not a cycle to wait out.
Editorial analysis · Real Estate Trail Editorial
On the RET wire
- The 84th San Francisco story tracked on the wire in October 2026. All San Francisco coverage →
- Disclosed office deal value tracked in October 2026: $4.5B across 19 reported transactions. All Office coverage →
Computed from Real Estate Trail’s own tracked coverage
The $48 million CMBS loan on the lower eight floors of 1155 Market Street has been liquidated with nothing returned to principal, after the former city-leased office space sold for about $8.1 million and liquidation c…
External link. Real Estate Trail does not republish source content.
Related coverage — San Francisco · Office
Mission Bay Office Asking Rents Hit Record $130.90 Per SQFT as SOMA Rates Jump 32% Year Over Year
San Francisco office landlords are pricing their remaining large blocks like a seller's market again, driving Mission Bay/China Basin asking rents to a record and pushing South of Market rates up by nearly a third in…
Institutional Buyers Top 50% of San Francisco Office Sales for First Time Since 2022 as Volume Hits $2.91B
For the first time since 2022, institutional buyers account for more than half of San Francisco's office investment volume this year, according to CBRE's Q3 2026 San Francisco office report, while private buyers have…
San Francisco’s SoMa West Office Vacancy Sits at 19%, but Nearly 35% of Its Space Is Up for Lease
SoMa West's 19.1 percent office vacancy sits well below San Francisco's citywide rate, but 34.8 percent of its space is being marketed for lease, a 15.7-point gap that is the widest of any submarket Colliers tracks an…
AI Firms Lease 2.9 Million SQFT in San Francisco in H1 2026, Topping Any Prior Full Year
A new Savills and CompStak report finds that AI companies leased 2.9 million square feet of San Francisco office space in the first half of 2026, more than in any previous full year, as the sector traded discounted su…
717 Market Street, a 32% Leased 81,000 SQFT Creative Office Building, Hits the Market in San Francisco
An eight-story historic office building on Market Street owned by an affiliate of Tokyo-based Digital Garage has been put up for sale roughly one-third leased, testing how much investors and owner-users will pay for l…
San Jose Office Pipeline Runs Dry After Google’s Caribbean Campus Delivers
Marcus & Millichap expects 1.3 million square feet of office completions in the San Jose metro this year, all of it tied to Google's owner-occupied Caribbean campus in Sunnyvale, with no meaningful projects under cons…