The Mira was the last gasp of San Francisco’s downtown development boom. Completed in 2019, a year after Salesforce Tower, the 39-story residential skyscraper remade the city’s skyline with its twisting, rippled facade.
Its location right in front of the Embarcadero, near the base of the Bay Bridge, made it an instant hit among buyers. Even after downtown real estate took a nosedive in 2022, the Mira managed to sell nearly all 392 units last year.
On the surface, the development was executed perfectly by New York-based developer Tishman Speyer, which has also partnered with the San Francisco Giants on Mission Rock, the new business and residential community in the shadow of Oracle Park. To round out its offering at the Mira, the developer attracted Sweetgreen, Saint Frank Coffee, and Mili Wine Bar to lease the ground-floor retail spaces.
But a condo in the Mira comes with a major asterisk, as anyone who tries to buy or sell there quickly finds out. The property has been blacklisted by Fannie Mae and Freddie Mac, making a conventional mortgage — expensive to begin with because of high interest rates — even more difficult, or impossible, to obtain.
The government-backed mortgage companies maintain the confidential list as a registry of properties deemed too risky to guarantee; for example, those in the Florida neighborhood where beachfront towers collapsed in 2021. The list has grown exponentially in the last four years as a result of disasters, the insurance crisis, and new state laws.
The Standard confirmed through three independent sources that the Mira was flagged by Fannie Mae and Freddie Mac this year for reasons pertaining to unresolved litigation. And while it sounds like the building is being sued, confusingly, that’s not actually the case.
According to Boston law firm Allcock Marcus — which has access to the list but did not disclose individual addresses — there are 19 San Francisco condo properties on Fannie Mae and Freddie Mac’s list. Four of those, including the Mira, were flagged for pending litigation, while 10 were marked for critical repairs or deferred maintenance. The remainder were marked for various reasons including ownership or resale restrictions and commercial space violations.
So what gives? Is the Mira sinking into the ground, like the nearby Millennium Tower once was? Or are the balconies at risk of falling apart? Turns out the issue is neither, according to sales disclosure documents reviewed by The Standard.
Outside of a personal injury suit settled in 2022 by an individual who claimed to have been injured while walking by the Mira construction site, the property has no major structural defects that would make it a hazard to live in.
What does need fixing is the roof-top window-washing unit, a permanent crane that lowers workers down the facade. An examination by a third-party inspection firm last year found the equipment “not functional” and leaking fluid. The inspection also noted needed repairs to planters and exposed electrical systems.
Residents have flagged the building’s water filtration system for releasing “black particles” and complained about an odor that suggests the presence of mold or Legionella bacteria.
None of these complaints amounted to a lawsuit, yet Fannie Mae and Freddie Mac flagged the building for unresolved litigation.
Experts say what’s transpiring at the Mira is par for the course for a new development that still has active warranty — comparable to bumper-to-bumper coverage for cars that cover the cost of repair or replacement during a set period of time or mileage. The term for most building warranties is 10 years. Construction at the Mira topped off in 2019.
By filing repair requests to the builders as one complaint, the Mira’s homeowners association has technically opened a legal action that will, at the very least, require mediation to see if such findings are accurate. The Mira will remain on the mortgage blacklist until each issue the HOA brought up is remedied or dismissed.
“We are in active discussions with Mira’s homeowners association and are confident we can achieve a resolution to the issues,” a spokesperson for Tishman Speyer said. “In the meantime, we have found members of the lending community to be constructive and flexible in providing lending products to potential buyers of the few remaining units at Mira.”
Indeed, there are workarounds, albeit more expensive ones if a buyer isn’t paying all cash, said Hal Light, a mortgage broker. “Rather than a blacklist, think of it as a ‘guilty until proven innocent’ list,” he said. “The onus is on [the HOA] to show them that they’ve fixed whatever issue was flagged.”
On top of making sure a borrower’s finances are adequate to cover a loan, lenders now have to go through an extra layer of property checks for condominium properties after a string of disasters — including a 2015 balcony collapse in Berkeley that killed six Irish students — raised concerns about how buildings age.
While Fannie Mae and Freddie Mac don’t want to guarantee a loan on the Mira, other lenders could look into the cited issues themselves and find that they are willing to tolerate the risks and offer buyers mortgages with higher interest rates and down-payment requirements, Light said.
Since the blacklist is not publicized, a buyer wouldn’t know that a property has been flagged until submitting a request for a mortgage, Light added.
“It’ll have an effect on the home’s value, for sure,” Light said of the list. “The pool of buyers is going to shrink because some won’t be able to get loans, or people are going to ask why a listing has been sitting on the market for more than 90 days.”
If a party wants to move forward, mortgage brokers will shop the buyer’s profile — which would include credit history and down-payment amount — to wholesale lenders to see if any would make a loan on the property.
Retail banks like Chase or Bank of America may have alternative mortgage products of their own, but they’re unlikely to show borrowers what rates competitors are offering, Light noted.
As for the Mira, the litigation tag will remain at least until the end of the year, as inspections and investigations are ongoing, and the HOA and Tishman Speyer have two mediation sessions scheduled, in October and December.
“Try to work with someone you know will do their due diligence on the property,” Light advises prospective homebuyers. “But most importantly, don’t fall in love too fast.”