Rialto Takes Back 35,000 SQFT 580 Market St. Office After Paragon’s $17.5MM Debt Goes Unpaid
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. 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
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Computed from Real Estate Trail’s own tracked coverage
Paragon Company paid about $690 per square foot for the 1907-built Market Street building in 2015. It has now been appraised at about $283 per square foot, and Rialto Capital took it back in foreclosure with $17.5 mil…
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