A Chicago investment firm is doubling down on downtown San Francisco, snapping up 101 Mission Street for roughly $82 million in a wager that the city’s office market is finally finding its footing again. Callahan Capital Partners and a local partner say they plan to reposition the Financial District tower as demand returns for well-located, high-quality space.
Callahan Capital Partners teamed with Probis Strategic Solutions to buy the building in a deed-in-lieu-of-foreclosure deal after lenders moved to take control of the property. The pair paid about $82 million, according to The San Francisco Standard. It is Callahan’s first office purchase in San Francisco and lands after several bruising years for downtown landlords.
The sale follows Elliott Investment Management’s acquisition of the tower’s loan last summer and the earlier 2018 purchase by New York-based Vanbarton, which later defaulted on a roughly $93 million mortgage, as reported by The Real Deal. Brokers and market filings indicate lenders opted for a deed-in-lieu to sidestep a drawn-out foreclosure process and get the asset stabilized more quickly.
Plans for 101 Mission
Tim Callahan, CEO of Callahan Capital, said the firm intends to pump money into renovations and common-area upgrades to attract corporate and AI-focused tenants. Probis managing partner David Dowdney described the purchase as evidence of “meaningful signs of recovery” in San Francisco’s office market, according to The San Francisco Standard. The new ownership group says it plans to move quickly to stabilize cash flow while marketing larger blocks of contiguous space to prospective tenants.
Why investors are coming back
Industry analysts point to AI-driven hiring and renewed tech leasing as major tailwinds for top-tier markets such as San Francisco. According to CBRE, its Tech-30 report found that AI companies have been among the most active leasers in the Bay Area and that tech demand helped lift leasing volumes in late 2024.
What it means for tenants and downtown
Industry listings show 101 Mission totals roughly 203,000 square feet and had about 64,000 square feet available for lease late last year, according to PropertyShark. That setup indicates more than half of the building remains occupied, giving the new owners room to consolidate tenants, renovate floors and reposition the tower for modern office users.
CoStar framed the acquisition as the opening move in the high-rise’s repositioning and a bet that downtown San Francisco can regain its pull for office tenants. Whether Callahan and Probis can turn a discounted purchase into sustained leasing and higher rents will be a closely watched test of how durable the city’s downtown comeback really is.
