TMG Partners and Bridges Capital have acquired the 80,000-square-foot office building at 149 New Montgomery Street in San Francisco’s Financial District. The transaction was completed through a deed in lieu of foreclosure after the previous owner, Monahan Pacific, defaulted on its mortgage. The final sale price has not been disclosed.
The six-story property was originally constructed in 1907 as a four-story building, with two additional floors added during the 1930s. Current tenants include tech firms such as Scality and SuperAnnotate. Café Madeleine operates ground-floor retail space.
The acquisition comes amid ongoing difficulties in San Francisco’s office market. According to Cushman & Wakefield’s second-quarter report, the city currently has the highest office vacancy rate in the United States at approximately 35 percent. Over the past two years, about two-thirds of local office properties have sold for less than their previous prices—a higher proportion than any other major U.S. city except Houston, based on data from Yardi Research (https://www.yardibreeze.com/blog/2023/10/commercial-real-estate-sales-activity-decline-q3-2023/).
Ben Kochalski, president and CIO at TMG Partners, stated that San Francisco’s South Financial District is expected to be “in high demand from tech, [artificial intelligence] and professional services firms” due to its proximity to Market Street, Salesforce Transit Center and the Moscone Center. Kochalski added that TMG plans renovations which would “enhance the creative office elements of this brick and timber building while preserving its architectural charm.”
Recent transactions along New Montgomery corridor reflect wider market trends: Ridge Capital Investors bought a nearby 20-story tower at 33 New Montgomery Street for roughly $75 million last October—half its price from ten years ago—and CrossHarbor Capital Partners purchased another property at 55 New Montgomery Street for $15 million following a foreclosure last November.
TMG Partners secured financing from U.S. Bank as trustee before completing the purchase via deed in lieu of foreclosure.
