Lone Star Funds has taken ownership of 600 California Street via a $216m (€184.5m) credit bid after no external bids were received at auction for the 360,000sqft San Francisco office building.
In January, Lone Star’s Real Estate Fund VII acquired the mortgage secured by the 600 California Street office tower.
Lone Star said it has now leveraged its position as lender to acquire the asset, after no external bids were received at auction. This allowed Lone Star to use the debt it purchased in January for approximately $130m to secure the property, the manager said.
The price paid by Lone Star represents approximately $361per sqft, a significant decline from the $900 per sqft paid by WeWork Capital Advisors in 2019.
According to sources familiar with the property, the 600 California Street tower was appraised in 2024 at $109m.
Jerome Foulon, global head of commercial real estate at Lone Star, said: “Lone Star real estate funds invest in commercial real estate broadly in both debt and equity. In 600 California, we saw the opportunity to own a trophy-quality building in a strong market that is recovering. Our goal is to improve the attractiveness and performance of the property.”
The building is currently largely vacant. WeWork previously served as a major tenant, occupying nearly 200,000sqft, but no longer holds any space in the property.
To read the latest IPE Real Assets magazine click here.
