Overview

• Morningstar’s latest appraisal pegs the 865 Market St. property at $195 million, more than $1 billion below its 2016 value, with 93% of space vacant.
• A foreclosure sale has been postponed eight times and is scheduled for Thursday, Sept. 18, according to local reports.
• The owner and the San Francisco Unified School District are negotiating over alleged ground-lease defaults, with SFUSD confirming talks with the foreclosing lender.
• The decades-old ground lease obligates millions in annual rent, a structure experts say hampers financing and any large-scale redevelopment.
• Developers say converting the nine-level mall to housing is impractical because of massive interior floorplates, lack of required sunlight, and high retrofit costs, as retail losses tied to e-commerce, the pandemic, and local operating pressures persist.