Market Extra: Former WeWork office building in San Francisco sees value slashed by about 66%

by | Apr 19, 2023 | Stock Market

A former San Francisco WeWork building has seen its property value slashed by about 66%, according to Trepp. The building at 25 Taylor St. a revamped multi-floor brick space in San Francisco’s theater district, was once almost entirely leased to WeWork, the formerly high-flying co-working startup co-founded by Adam Neumann.

The building was valued at $28.1 million in 2014, when it was last financed by Wall Street in the commercial mortgage-backed securities market, but a new appraisal pegged its value at only $9.5 million, according to Trepp, a platform that tracks commercial real-estate data. Office buildings have become an increasing source of worry since the pandemic gave rise to remote and flexible work arrangements. Adding to the sector’s woes, about $1 trillion of commercial real-estate loans are coming due through 2024, at much higher interest rates and as credit becomes more scarce. Related: As Twitter rethinks its San Francisco footprint, a bigger $9 billion question hangs over the city’s office market The former San Francisco WeWork at 25 Taylor St. has been mostly empty for years, except for a dentist tenant, and the building is up for sale, according to a person with direct knowledge of the situation. Co-working tenants have made past inquires, but without reaching a deal. Private-equity investor Scott Plank took out a $18.5 million mortgage on the building in 2014 when the cash-burning WeWork had leased all but 3% of the space, according to public documents. The loan was pooled into a $910.5 million commercial mortgage bond deal, which was then sold to investors. A call to Plank for comment wasn’t returned. The borrower’s last payment was in December o …

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