Two side-by-side office buildings on the edge of San Francisco's Union Square, 180 Sutter St. and 222 Kearny St., were recorded as sold at a foreclosure auction last month for only $5 million, a fraction of what the owners paid in 2019. Together they total roughly 145,000 square feet of office space, which pencils out to about $34 per square foot and highlights how hard parts of downtown's office market have been hit since the pandemic.
As reported by the San Francisco Chronicle, a trustee's deed filed after the December foreclosure shows a $5 million "winning bid" that transferred title and identifies the buyer as SVN Properties LLC, a newly formed Richmond entity registered to Alex Naumov. The trustee's deed is a public record of the title transfer, but as the Chronicle notes, it may not capture any private agreements or the full amount a lender ultimately recovers.
Why That $5 Million Price Tag Is Misleading
Legal and market observers say foreclosure documents often list only the number needed to move title, not the complete economics of a commercial mortgage-backed securities workout. A land-use attorney told the San Francisco Chronicle the Trustee's Deed Upon Sale is "simply evidence that the lender took title following a foreclosure," and that banks commonly rely on credit bids or confidential deals to resolve large loans. In other words, the $5 million headline figure can conceal a more complicated financial story.
How The Loan Went Bad
The two buildings were purchased in 2019 for roughly $74.4 million, and appraisers pegged their combined value at about $18.3 million last summer, according to reporting by The Real Deal. The debt, a roughly $47.5 million CMBS loan originated by Goldman Sachs, went into special servicing after owners Gem Realty Capital and Flynn Properties defaulted on payments in April 2024, and lenders spent months marketing the loan before ultimately opting for a foreclosure sale.
What This Sale Says About Downtown
The mix of falling appraisals and high vacancy has pushed some once-prized downtown properties into distressed territory and opened the door for nontraditional buyers. CBRE's Q1 2025 research put San Francisco's office vacancy rate in the mid-30s, which helps explain why lenders may choose to clear title rather than sit on troubled loans. For nearby owners, tenants, and retailers around Union Square, the sale is another reminder that any downtown recovery is likely to be uneven and heavily dependent on who has the capital to reposition space.
What Comes Next For The Buildings
Because the public deed may not disclose private settlement terms, it is unclear whether the lender recouped more than the recorded $5 million or what the buyer intends to do with the properties. Any serious repositioning, whether recapitalization, a renewed leasing push, or a conversion to other uses, will take money and time, and tenants will be watching for signs of ownership or lease changes. We reached out to the parties named on the deed and to the former owners and have not yet received a response.
