A fully leased office building near San Francisco's Jackson Square neighborhood has quietly changed hands for $49 million — not through a traditional sale, but through a deed-in-lieu of foreclosure after its owners couldn't repay a maturing loan. Pendulum Property Partners, a firm based in Orange County, bought the debt on 747 Front Street before taking control of the 82,000-square-foot property, marking the company's first San Francisco acquisition.
The deal, reported by The Real Deal and attributed there to the San Francisco Business Times, works out to roughly $600 per square foot — a steep discount from the approximately $820 per square foot that Bridgeton Holdings and Morgan Stanley paid when they bought the building in 2019 for $68.4 million. That loan, totaling $54.9 million at the time, was not repaid at maturity, and the outstanding balance had fallen to about $54.5 million by the time Pendulum stepped in and took control of the property.
Bridgeton Holdings and Morgan Stanley had kept 747 Front Street leased through the pandemic and invested in upgrades including a new roof deck, according to the same report. The building, originally constructed in 1909, has a longer paper trail than most: Turkish investor Polidev bought it for $22.8 million in 2012, according to IPE Real Assets, before selling it to Bridgeton Holdings for $68.4 million in September 2019, per reporting from The Registry.
Who's Actually in the Building
Despite the ownership shakeup, the tower remains fully occupied. Tenants include e-commerce company Minted, whose headquarters occupies space in the building, along with venture firm IVP and law firm BraunHagey & Borden. BraunHagey & Borden signed a 10-year lease for 22,413 square feet across the entire top floor in late 2023, according to CoStar, anchoring the building's upper level. Ground-floor amenities include Empower Gym and Andytown Coffee, giving the property a mixed-use feel that's become a hallmark of the neighborhood.
Pendulum was founded in July 2016 by Kevin Hayes, a former senior executive at Lincoln Property Co., with a mandate focused on value-add acquisitions and redevelopments across major West Coast markets, according to Commercial Search. The 747 Front Street deal brings the firm into San Francisco through a stabilized asset caught up in debt distress.
Jackson Square's Staying Power
The neighborhood surrounding 747 Front Street has earned a reputation as one of San Francisco's more resilient commercial pockets. Jackson Square has maintained strong leasing activity and comparatively resilient retail even as broader office vacancy across the city remains elevated, and the district has built up concentrations of venture capital and professional services firms that have helped it earn the nickname “The New Sand Hill Road” among commercial brokerages, per the same Registry report on Bridgeton's original purchase.
That resilience is playing out against a backdrop of citywide recovery. San Francisco led major U.S. cities in office vacancy reduction in the second quarter of 2026, with overall vacancy dropping to 29.7% as artificial intelligence firms accounted for nearly 30% of local leasing activity since 2023, according to The Real Deal. Tenants signed 7 million square feet of leases in the first half of 2026 alone, pushing net absorption to nearly 2.9 million square feet and already outpacing all of 2025's total absorption.
What Comes Next for Stabilized Offices
The 747 Front Street transaction could push pricing expectations higher for other stabilized San Francisco offices, following a similar signal set earlier this year when Strada Investment Group purchased 1 De Haro Street for $771 per square foot. Two other listings are expected to test whether buyers will keep paying premium prices for well-leased assets: 295 Bay Street, home to AI company Cursor's headquarters, and 655 Montgomery Street, the Beacon Capital Partners-owned tower Hoodline previously reported had been listed for $150 million.
Deed-in-lieu transactions like the one at 747 Front Street have drawn scrutiny at City Hall. San Francisco voters will decide on Proposition J this November, a measure that would eliminate real property transfer tax exemptions for commercial mortgage foreclosures and loan-takeover transactions starting in March 2027, according to GrowSF. Under the city's current Proposition I transfer tax schedule, transactions of $25 million or more are taxed at 6%. Separately, the BUILD Act was introduced on February 25, 2026, and would cut transfer tax rates on properties valued at $25 million or more from 6% to 3%; single-family residences would not be affected, according to Greenberg Traurig.
Elsewhere in San Francisco, 300 3rd Street is a 36,000-square-foot property sold for $19.25 million, with Bridgeton as the seller, in an announcement dated May 26, 2026. Out-of-town investors are increasingly betting on San Francisco's recovery, and Pendulum's move into Jackson Square adds another name to a growing list of buyers wagering that the city's AI-fueled leasing rebound has staying power.
