Callahan Capital Partners, a real estate private equity firm based in Chicago, has bought a 22-story office tower at 101 Mission St. in the Financial District.
Sources familiar with the deal said Callahan partnered with local real estate firm Probis Strategic Solutions to pay roughly $82 million for the building, which was constructed in 1985.
The deal is a deed in lieu of foreclosure, meaning it was sold by lenders who had foreclosed on the debt tied to the building.
New York-based Vanbarton Group purchased 101 Mission St. for $163 million in 2018 before defaulting on a $93 million mortgage. Vanbarton sunk more than $30 million in upgrades to common areas and tenant spaces.
In July, activist investor Elliott Investment Management acquired the debt for an undisclosed amount, according to public documents, before marketing the property for sale.
The building at 101 Mission St. marks Callahan’s first office purchase in San Francisco. CEO Tim Callahan said the firm intends to renovate.
“This transaction provides immediate stability for the asset and allows us to move forward quickly with a thoughtful repositioning strategy,” he said in a statement.
David Dowdney, managing partner of Probis, a real estate advisory firm with a registered address in Portola Valley, said the transaction was spurred by the San Francisco office market showing “meaningful signs of recovery” driven by AI-oriented companies.
“We believe high-quality, well-located office buildings in San Francisco are entering a new phase of opportunity, and 101 Mission is exceptionally well-positioned to benefit from that recovery,” Dowdney said in a statement.
The building, which totals 213,000 square feet, is more than 50% occupied, with tenants that include Rubicon Point Partners, Constellation Brands, and other professional services companies.