New York-based office REIT Paramount Group Inc. appears poised to give up a pair of downtown San Francisco office properties it acquired in 2019 for a total of nearly $950 million, the San Francisco Business Times reported. This would position Paramount as the latest office landlord trying to unload buildings purchased at the height of the city’s pre-pandemic market.
Paramount wrote its investment in the 293,000-square-foot 111 Sutter St. down to zero at the end of 2022, and subsequently defaulted on its loan for the property before negotiating a cash flow loan. As of the final quarter of 2023, Paramount has also written down to zero its investment in Market Center, a two-building, 750,000-square-foot office complex roughly a block away from 111 Sutter, reported the Business Times.
“These two assets are in workout mode,” CEO Albert Behler said on a Feb. 15 earnings call. “We do not know what an ultimate resolution will look like, and there is a strong possibility that these assets may not be in the Paramount portfolio going forward.”
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