A century-old landmark on one of San Francisco's most storied corners has defaulted on its mortgage. The Phelan Building at 760 Market St., the triangular flatiron tower that has anchored the intersection of Market and O'Farrell streets and Grant Avenue since 1908, failed to pay off a $215 million loan, according to city tax records.
The San Francisco Standard reported that Phelan Building LLC received a notice of default last month. Insurance giant AIG is owed $192 million on the loan, per tax records cited by the Standard, and is now seeking to foreclose on the 11-story building. Representatives for both the Hotung family, which controls the ownership entity, and Newmark did not respond to requests for comment, according to the same report.
A Family Firm With Coast-to-Coast Holdings
Phelan Building LLC is linked to Patrick and Ellen Hotung, who have origins in Hong Kong and control a Buffalo, New York-based commercial real estate firm, the Standard reported. That firm also holds properties in Manhattan, Chicago, and Denver. The company purchased the Phelan Building in 2016, though the exact price remains disputed: Reuters reported the sale at $375 million, while the San Francisco Business Times put the figure at $374 million, with Thor Equities as the seller in both accounts.
The building's reported size is similarly muddled across sources. Connect CRE has described it as 298,000 square feet, while a Registry report put the figure at 299,549 square feet. At the time of the 2016 purchase, the Standard reported, the Phelan Building had a handful of office tenants and roughly 52,000 square feet of retail space, with past reporting from Reuters noting Credit Karma and Medium among the office occupants.
From Marshalls to Empty Storefronts
Retail tenants in 2016 included Marshalls, Starbucks, Walgreens, and a cosmetics company, according to the Standard. The pandemic hollowed out Market Street storefronts more broadly, and the building's largest retail space has sat empty since Marshalls moved out in 2021. Today the building still hosts a Verizon store and an outpost of Little Sweet, the Standard reported.
On the office side, the picture looks sturdier. Figma signed a 97,606-square-foot lease renewal at 760 Market St. in 2024, according to Connect CRE, though the exact terms weren't disclosed. The Standard separately reported that Figma has leased several floors of the building since early 2024. Phelan Building LLC president Patrick Hotung told Connect CRE that the renewal reflects a broader trend of tech companies solidifying their presence in San Francisco.
A Market Still Finding Its Footing
The default lands as San Francisco's office market shows signs of healing but remains far from fully recovered. The city's overall office vacancy rate stood at 26.0% at the end of the third quarter of 2026, down from a 32% peak in 2024, according to a market report from Kidder Mathews.
Retail tells a more uneven story. Kidder Mathews noted that the broader flight to quality is expected to widen the gap between top-tier office assets and older Class C buildings lacking modern upgrades.
The Phelan Building isn't the only downtown property to run into trouble with its lender this year. Rialto Capital seized 580 Market Street, a 35,000-square-foot Financial District building, according to The Real Deal. A notice of default was served there in October after the loan, which matured in June 2025, went unpaid, and appraisers valued that building at $9.9 million in March — nearly 60% below its $24.2 million purchase price in 2015. The Standard reported that the Phelan Building could next be sold at auction as part of the foreclosure process.
A Landmark Rebuilt After the 1906 Quake
The building standing at 760 Market St. today is itself a replacement. The present building was built in 1908 after the original was destroyed in the fire that followed the 1906 earthquake, as detailed by the Standard.
More than a century after it rose from the ashes of one disaster, the building now finds its future tied up in a foreclosure proceeding it will have to weather in a different way.
