Kevin V. Nguyen

For nearly two decades, San Franciscans have been sold a pipe dream about&nbsp;Parkmerced. The 3,221-unit development, hastily built in the aftermath of World War II, spans some 152 acres of the west side, adjacent to San Francisco State University, the Stonestown Galleria, and some of the country’s best golf courses.&nbsp;

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For nearly two decades, San Franciscans have been sold a pipe dream about&nbsp;Parkmerced. The 3,221-unit development, hastily built in the aftermath of World War II, spans some 152 acres of the west side, adjacent to San Francisco State University, the Stonestown Galleria, and some of the country’s best golf courses.&nbsp;

Since 2005, a New York-based developer by the name of Robert Rosania has been promising to supercharge the city’s largest housing complex into a “vibrant, pedestrian-focused” neighborhood.&nbsp;

Since 2005, a New York-based developer by the name of Robert Rosania has been promising to supercharge the city’s largest housing complex into a “vibrant, pedestrian-focused” neighborhood.&nbsp;

His vision was to capitalize on San Francisco’s growth potential by building approximately 10,000 homes and a string of neighborhood amenities, including a retail corridor, parks, and stops on the Muni M line, which connects <a href="https://sfstandard.com/2024/09/11/southwest-san-francisco-tale-of-two-cities/">southwest neighborhoods</a> to downtown.&nbsp;

In the city&#8217;s southwest corner, real estate is booming and busting at once

His vision was to capitalize on San Francisco’s growth potential by building approximately 10,000 homes and a string of neighborhood amenities, including a retail corridor, parks, and stops on the Muni M line, which connects <a href="https://sfstandard.com/2024/09/11/southwest-san-francisco-tale-of-two-cities/">southwest neighborhoods</a> to downtown.&nbsp;

But 14 years after his redevelopment proposal was greenlit by the city, Rosania and his investors have yet to break ground.&nbsp;

But 14 years after his redevelopment proposal was greenlit by the city, Rosania and his investors have yet to break ground.&nbsp;

Residential units rest at Parkmerced near San Francisco State University on Friday, Sept. 6, 2024.

<figure class="wp-block-image size-large"><img src="https://content.sfstandard.com/wp-content/uploads/2024/09/202240910-southwestsftaleof2cities_0401_7a2586.jpg?w=2001" alt="The image shows modern townhouses with green and teal facades in front of a large beige apartment building. Cars are parked along the street." class="wp-image-310123"/><figcaption class="wp-element-caption">The same developer has been trying to transform the neighborhood for two decades.</figcaption></figure>

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<figure class="wp-block-image size-large"><img src="https://content.sfstandard.com/wp-content/uploads/2024/09/202240910-southwestsftaleof2cities_0401_7a2586.jpg?w=2001" alt="The image shows modern townhouses with green and teal facades in front of a large beige apartment building. Cars are parked along the street." class="wp-image-310123"/><figcaption class="wp-element-caption">The same developer has been trying to transform the neighborhood for two decades.</figcaption></figure>

During that time, he has broken up with the company with which he embarked on the project, Stellar Management, and launched his own, Maximus Real Estate Partners. He has nearly defaulted on the mortgage twice. And he watched as first the Great Recession crippled the investment market, then as the pandemic struck.&nbsp;

During that time, he has broken up with the company with which he embarked on the project, Stellar Management, and launched his own, Maximus Real Estate Partners. He has nearly defaulted on the mortgage twice. And he watched as first the Great Recession crippled the investment market, then as the pandemic struck.&nbsp;

Last month came what is likely a double death knell. Lenders petitioned the courts to put Parkmerced under receivership, stripping Maxmius of control, and weeks later, the company and Rosania were named in a sexual harassment lawsuit.

Last month came what is likely a double death knell. Lenders petitioned the courts to put Parkmerced under receivership, stripping Maxmius of control, and weeks later, the company and Rosania were named in a sexual harassment lawsuit.

Here is a rundown of how a billion-dollar housing development comes undone.&nbsp;

Here is a rundown of how a billion-dollar housing development comes undone.&nbsp;

<h2 class="wp-block-heading" id="h-timeline-nbsp">Timeline&nbsp;</h2>

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<h2 class="wp-block-heading" id="h-timeline-nbsp">Timeline&nbsp;</h2>

2005: Rosania, principal at New York-based Stellar Management, acquires a controlling interest in the Parkmerced property alongside Boston-based Rockpoint Group, with plans to revive the aging development. The deal reportedly <a href="https://www.sfgate.com/business/article/N-Y-group-buys-S-F-complex-Parkmerced-sold-to-2566517.php">values the complex at $700 million</a>.&nbsp;

2005: Rosania, principal at New York-based Stellar Management, acquires a controlling interest in the Parkmerced property alongside Boston-based Rockpoint Group, with plans to revive the aging development. The deal reportedly <a href="https://www.sfgate.com/business/article/N-Y-group-buys-S-F-complex-Parkmerced-sold-to-2566517.php">values the complex at $700 million</a>.&nbsp;

2010: The ownership group announces it is in <a href="https://www.sfgate.com/business/article/Fate-of-S-F-s-Parkmerced-complex-in-limbo-3262009.php">danger of defaulting on a $500 million mortgage</a> but still plans to move forward with a multidecade expansion project that would triple the amount of housing at the site while delivering new retail and offices and public infrastructure improvements.&nbsp;

2010: The ownership group announces it is in <a href="https://www.sfgate.com/business/article/Fate-of-S-F-s-Parkmerced-complex-in-limbo-3262009.php">danger of defaulting on a $500 million mortgage</a> but still plans to move forward with a multidecade expansion project that would triple the amount of housing at the site while delivering new retail and offices and public infrastructure improvements.&nbsp;

“If worse came to worst and they could not continue with the project, the development agreement only adds value to the property,&#8221; Michael Yarne, former development adviser in the Office of Economic and Workforce Development, tells the Chronicle.

“If worse came to worst and they could not continue with the project, the development agreement only adds value to the property," Michael Yarne, former development adviser in the Office of Economic and Workforce Development, tells the Chronicle.

“If worse came to worst and they could not continue with the project, the development agreement only adds value to the property,&#8221; Michael Yarne, former development adviser in the Office of Economic and Workforce Development, tells the Chronicle.

2011: The redevelopment is entitled after the Board of Supervisors <a href="https://www.sfgate.com/bayarea/article/Parkmerced-transformation-wins-approval-2370555.php">approves the multidecade plan in a 6-5 vote</a>. The controversial proposal includes replacing 1,500 rent-controlled townhomes with 7,200 “energy-efficient” units over 20 to 30 years.&nbsp;

2011: The redevelopment is entitled after the Board of Supervisors <a href="https://www.sfgate.com/bayarea/article/Parkmerced-transformation-wins-approval-2370555.php">approves the multidecade plan in a 6-5 vote</a>. The controversial proposal includes replacing 1,500 rent-controlled townhomes with 7,200 “energy-efficient” units over 20 to 30 years.&nbsp;

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2012: Rosania leaves Stellar to form Maximus Real Estate. In a lawsuit filed in New York&#8217;s <a href="https://www.nycourts.gov/Reporter/pdfs/2016/2016_30910.pdf">district court known as the Supreme Court,</a> Rosania claims he was ousted from the firm by his longtime mentor and partner, Laurence Gluck. In a court filing, Gluck (who died in 2024) responds that Rosania made a deal to refinance Parkmerced without his knowledge.

2012: Rosania leaves Stellar to form Maximus Real Estate. In a lawsuit filed in New York's <a href="https://www.nycourts.gov/Reporter/pdfs/2016/2016_30910.pdf">district court known as the Supreme Court,</a> Rosania claims he was ousted from the firm by his longtime mentor and partner, Laurence Gluck. In a court filing, Gluck (who died in 2024) responds that Rosania made a deal to refinance Parkmerced without his knowledge.

2012: Rosania leaves Stellar to form Maximus Real Estate. In a lawsuit filed in New York&#8217;s <a href="https://www.nycourts.gov/Reporter/pdfs/2016/2016_30910.pdf">district court known as the Supreme Court,</a> Rosania claims he was ousted from the firm by his longtime mentor and partner, Laurence Gluck. In a court filing, Gluck (who died in 2024) responds that Rosania made a deal to refinance Parkmerced without his knowledge.

2013: While the group is still facing legal challenges related to Parkmerced, Maximus pitches a luxury development near the 16th St. BART station that critics dub the “Monster in the Mission.”&nbsp;

2013: While the group is still facing legal challenges related to Parkmerced, Maximus pitches a luxury development near the 16th St. BART station that critics dub the “Monster in the Mission.”&nbsp;

2014: Maximus refinances the troubled loan, bringing in a group of investors led by New York-based 601 W Co. to buy out control from Rockpoint and Fortress Investment Group, <a href="https://www.wsj.com/articles/investor-group-gets-behind-parkmerced-development-1416955502">valuing the property at more than $1.35 billion</a>.&nbsp;

2014: Maximus refinances the troubled loan, bringing in a group of investors led by New York-based 601 W Co. to buy out control from Rockpoint and Fortress Investment Group, <a href="https://www.wsj.com/articles/investor-group-gets-behind-parkmerced-development-1416955502">valuing the property at more than $1.35 billion</a>.&nbsp;

Rosania is retained as owner and managing partner. A San Francisco judge dismisses an environmental lawsuit challenging the development’s sustainability goals.&nbsp;

Rosania is retained as owner and managing partner. A San Francisco judge dismisses an environmental lawsuit challenging the development’s sustainability goals.&nbsp;

2015: The city Planning Department <a href="https://sfplanning.org/project/parkmerced#timeline">approves Phase 1</a> of the project, which covers primarily residential development on the western portion of the site. Construction of this portion, with approximately 1,668 units, is scheduled to start in 2016 and be completed by 2022.&nbsp;

2015: The city Planning Department <a href="https://sfplanning.org/project/parkmerced#timeline">approves Phase 1</a> of the project, which covers primarily residential development on the western portion of the site. Construction of this portion, with approximately 1,668 units, is scheduled to start in 2016 and be completed by 2022.&nbsp;

They keys belonging to a family living in an RV and the map of Parkmerced apartments showing the buildings where some members of the mobile home community who previously lived on Zoo Drive will live after receiving housing vouchers on Monday, August 19, 2024. After a mayor's office effort to remove an RV community that relocated from a street near Stonestown Mall to one beside a Recreation Center, the families received housing vouchers at Parkmerced. The keys to at least 22 apartments were handed to immigrant families who had been targeted for living on RV parked in Zoo Drive in recent weeks, following an overturned local injunction that allowed the city to be more aggressive in its sweeps of encampments as a result of the Supreme Court's ruling in June.

<figure class="wp-block-image size-large"><img height="1667" width="2500" src="https://content.sfstandard.com/wp-content/uploads/2024/08/20240819rvfamilyfolo-12_3b561d.jpg?w=2500" alt="A cluster of gold keys on a ring and a black key fob rest on a detailed map, with a marked area labeled &quot;Construction Coming Soon.&quot;" class="wp-image-303725"/><figcaption class="wp-element-caption">Keys belonging to a family that used to live in an RV sit atop a map of Parkmerced. The complex has housed some needy residents during and after the pandemic. </figcaption></figure>

<figure class="wp-block-image size-large"><img src="https://content.sfstandard.com/wp-content/uploads/2024/08/20240819rvfamilyfolo-12_3b561d.jpg?w=2500" alt="A cluster of gold keys on a ring and a black key fob rest on a detailed map, with a marked area labeled &quot;Construction Coming Soon.&quot;" class="wp-image-303725"/><figcaption class="wp-element-caption">Keys belonging to a family that used to live in an RV sit atop a map of Parkmerced. The complex has housed some needy residents during and after the pandemic. </figcaption></figure>

2017: The below-market requirement of the first phase is approved by the Mayor’s Office of Housing and Community Development. Despite the approvals, construction never begins.

2017: The below-market requirement of the first phase is approved by the Mayor’s Office of Housing and Community Development. Despite the approvals, construction never begins.

2019: Maximus refinances its Parkmerced debt again, this time for $1.8 billion from Barclays, Citigroup, and Aimco. The loan has a maturity date of December 2024. Around this time, Maximus earns approval for a 697-unit project in San Leandro at 899 Alvarado St.&nbsp;

2019: Maximus refinances its Parkmerced debt again, this time for $1.8 billion from Barclays, Citigroup, and Aimco. The loan has a maturity date of December 2024. Around this time, Maximus earns approval for a 697-unit project in San Leandro at 899 Alvarado St.&nbsp;

Construction is supposed to start in the spring/summer of 2020.&nbsp;

Construction is supposed to start in the spring/summer of 2020.&nbsp;

Meanwhile, Maximus <a href="https://missionlocal.org/2020/02/monster-mashed-developer-pulls-plug-on-contentious-1979-mission-project-puts-land-up-for-sale/">pulls the plug</a> on its Mission project in February. A month later, the Covid-19 pandemic shuts down San Francisco.&nbsp;

Meanwhile, Maximus <a href="https://missionlocal.org/2020/02/monster-mashed-developer-pulls-plug-on-contentious-1979-mission-project-puts-land-up-for-sale/">pulls the plug</a> on its Mission project in February. A month later, the Covid-19 pandemic shuts down San Francisco.&nbsp;

2023: Aimco sells 20% of its loan mezzanine position in Parkmerced <a href="https://www.aimco.com/aimco-closes-on-partial-sale-of-parkmerced-mezzanine-loan-and-announces-amended-agreement-for-sale-of-remaining-investment/">for $33.5 million</a>, giving the unnamed purchaser an option to acquire the remaining amount for $134 million.&nbsp;

2023: Aimco sells 20% of its loan mezzanine position in Parkmerced <a href="https://www.aimco.com/aimco-closes-on-partial-sale-of-parkmerced-mezzanine-loan-and-announces-amended-agreement-for-sale-of-remaining-investment/">for $33.5 million</a>, giving the unnamed purchaser an option to acquire the remaining amount for $134 million.&nbsp;

In the thick of the pandemic, Parkmerced’s vacancy rates reportedly approach 30%. Complaints <a href="https://www.sfchronicle.com/bayarea/article/parkmerced-apartments-problems-19423636.php">continue to pile up</a> at the Department of Building Inspection, reporting mold, squatters, and deferred maintenance.&nbsp;

In the thick of the pandemic, Parkmerced’s vacancy rates reportedly approach 30%. Complaints <a href="https://www.sfchronicle.com/bayarea/article/parkmerced-apartments-problems-19423636.php">continue to pile up</a> at the Department of Building Inspection, reporting mold, squatters, and deferred maintenance.&nbsp;

2024: Maximus requests in April that its $1.5 billion CMBS loan enter special servicing, a process in which an intermediary is brought in to help renegotiate terms. Credit rating agency Morningstar reports that the property is about 83% occupied, with cash flow “well below” the point needed to cover its existing debt payments.&nbsp;

2024: Maximus requests in April that its $1.5 billion CMBS loan enter special servicing, a process in which an intermediary is brought in to help renegotiate terms. Credit rating agency Morningstar reports that the property is about 83% occupied, with cash flow “well below” the point needed to cover its existing debt payments.&nbsp;

The Roa family’s view from the kitchen of their new apartment in Parkmerced on Tuesday, Aug. 20, 2024. After a mayor's office effort to remove an RV community that relocated from a street near Stonestown Mall to one beside a Recreation Center, at least 22 housing vouchers were handed out for housing at Parkmerced, following an overturned local injunction that allowed the city to be more aggressive in its sweeps of encampments as a result of the Supreme Court's ruling in June.

<figure class="wp-block-image size-large"><img height="1667" width="2500" src="https://content.sfstandard.com/wp-content/uploads/2024/08/20240819rvfamilyfolo-part2-9.jpg?w=2500" alt="The image shows a view through a high window of a sunlit building, with a large tree, a small green utility box, and a parking lot with several cars below." class="wp-image-303738"/><figcaption class="wp-element-caption">The view of Parkmerced from an apartment. As the property lurches toward foreclosure, complaints of deferred maintenance pile up.</figcaption></figure>

<figure class="wp-block-image size-large"><img src="https://content.sfstandard.com/wp-content/uploads/2024/08/20240819rvfamilyfolo-part2-9.jpg?w=2500" alt="The image shows a view through a high window of a sunlit building, with a large tree, a small green utility box, and a parking lot with several cars below." class="wp-image-303738"/><figcaption class="wp-element-caption">The view of Parkmerced from an apartment. As the property lurches toward foreclosure, complaints of deferred maintenance pile up.</figcaption></figure>

The city’s Department of Homelessness and Supportive Housing provides vouchers for portions of the complex <a href="https://sfstandard.com/2024/08/21/this-is-a-win-families-are-moving-from-rvs-to-apartments-at-last/">to be leased out to needy residents</a>.&nbsp;

&#8216;This is a win&#8217;: Families are moving from RVs to apartments at last

The city’s Department of Homelessness and Supportive Housing provides vouchers for portions of the complex <a href="https://sfstandard.com/2024/08/21/this-is-a-win-families-are-moving-from-rvs-to-apartments-at-last/">to be leased out to needy residents</a>.&nbsp;

The effort to refinance the loan <a href="https://www.bizjournals.com/sanfrancisco/news/2025/03/19/parkmerced-receiver-san-francisco-maximus.html">falls apart in December</a> after months of negotiations, according to the San Francisco Business Times.

The effort to refinance the loan <a href="https://www.bizjournals.com/sanfrancisco/news/2025/03/19/parkmerced-receiver-san-francisco-maximus.html">falls apart in December</a> after months of negotiations, according to the San Francisco Business Times.

2025: In March, a San Francisco judge grants lenders’ request to place Parkmerced under receivership, putting San Diego-based Douglas Wilson Co. in charge of the property. Although Maximus can still technically work out a deal to keep control of Parkmerced, experts say it is highly unlikely.

2025: In March, a San Francisco judge grants lenders’ request to place Parkmerced under receivership, putting San Diego-based Douglas Wilson Co. in charge of the property. Although Maximus can still technically work out a deal to keep control of Parkmerced, experts say it is highly unlikely.

On March 24, Rosania’s personal assistant, Richaele Affannato, sues him and the company <a href="https://webapps.sftc.org/ci/CaseInfo.dll?CaseNum=CGC25623590&amp;SessionID=F50D10E60762FB0A2F53D6B5E92F377F9E6DD884">in San Francisco Superior Court</a> for sexual harassment, retaliation, wrongful termination, and failure to pay all wages due.&nbsp;

On March 24, Rosania’s personal assistant, Richaele Affannato, sues him and the company <a href="https://webapps.sftc.org/ci/CaseInfo.dll?CaseNum=CGC25623590&amp;SessionID=F50D10E60762FB0A2F53D6B5E92F377F9E6DD884">in San Francisco Superior Court</a> for sexual harassment, retaliation, wrongful termination, and failure to pay all wages due.&nbsp;

Among the allegations, Affannato says she was required to buy male performance-enhancement pills and that Rosania left pornography showing on a television at his San Francisco apartment when she was required to be present. Additionally, she said he showed a female receptionist a bag of dildos.&nbsp;

Among the allegations, Affannato says she was required to buy male performance-enhancement pills and that Rosania left pornography showing on a television at his San Francisco apartment when she was required to be present. Additionally, she said he showed a female receptionist a bag of dildos.&nbsp;

Rosania and Maximus have not responded to the lawsuit and did not respond to a request for comment.

Rosania and Maximus have not responded to the lawsuit and did not respond to a request for comment.

Parkmerced: How a long-promised billion-dollar housing project fell apart

Joshua Bote

WeWork is getting hounded by its landlords for $250 million worth of unpaid rent after it reneged on a massive lease in Downtown San Francisco.

WeWork is getting hounded by its landlords for $250 million worth of unpaid rent after it reneged on a massive lease in Downtown San Francisco.

In August, the embattled coworking giant wrote in a letter to its landlords—real estate investors Kennedy Wilson and Japanese construction giant Takenaka—that it had vacated the entirety of the 250,000-square-foot space it leased at 430 California St.&nbsp;

In August, the embattled coworking giant wrote in a letter to its landlords—real estate investors Kennedy Wilson and Japanese construction giant Takenaka—that it had vacated the entirety of the 250,000-square-foot space it leased at 430 California St.&nbsp;

WeWork signed the lease in March 2018 and signed a written guarantee promising “payment of all rent, expenses and charges” as part of the lease, which was slated to run until the end of 2036.&nbsp;&nbsp;

WeWork signed the lease in March 2018 and signed a written guarantee promising “payment of all rent, expenses and charges” as part of the lease, which was slated to run until the end of 2036.&nbsp;&nbsp;

According to a lawsuit filed Oct. 16 in San Francisco Superior Court, the company stopped paying rent in July, a month before the letter was sent. The company received a notice of default following that nonpayment.

According to a lawsuit filed Oct. 16 in San Francisco Superior Court, the company stopped paying rent in July, a month before the letter was sent. The company received a notice of default following that nonpayment.

Kennedy Wilson and Takenaka are requesting past due rent and future rent “discounted to present value,” among other charges, totaling $250 million, as a result of WeWork breaching its lease.

Kennedy Wilson and Takenaka are requesting past due rent and future rent “discounted to present value,” among other charges, totaling $250 million, as a result of WeWork breaching its lease.

This suit was <a href="https://www.bizjournals.com/sanfrancisco/news/2023/10/17/wework-400-california-kw-takenaka.html">first reported</a> by the San Francisco Business Times. Attorneys for Kennedy Wilson and Takenaka did not immediately respond to a request for comment.

This suit was <a href="https://www.bizjournals.com/sanfrancisco/news/2023/10/17/wework-400-california-kw-takenaka.html">first reported</a> by the San Francisco Business Times. Attorneys for Kennedy Wilson and Takenaka did not immediately respond to a request for comment.

<figure class="wp-block-image size-large"><img src="https://content.sfstandard.com/wp-content/uploads/2023/10/Screenshot-2023-10-23-at-3.14.18-PM.png?w=1860" alt="" class="wp-image-213897"/><figcaption class="wp-element-caption">WeWork told its landlords it has vacated the entirety of the 250,000-square-foot space it leased at 430 California St. </figcaption></figure>

Up until 2021, 14 floors of 430 California St. of WeWork’s space were occupied by cryptocurrency firm Coinbase. The space was put back on the market shortly after Coinbase CEO Brian Armstrong expressed a desire for his company to go remote-first.

Up until 2021, 14 floors of 430 California St. of WeWork’s space were occupied by cryptocurrency firm Coinbase. The space was put back on the market shortly after Coinbase CEO Brian Armstrong expressed a desire for his company to go remote-first.

A WeWork spokesperson disputed the claims in the suit. “We strongly disagree with the allegations in this lawsuit,” the spokesperson said in an emailed statement Monday. “We continue to be in active negotiations with the landlord about WeWork’s future at this location.”&nbsp;

A WeWork spokesperson disputed the claims in the suit. “We strongly disagree with the allegations in this lawsuit,” the spokesperson said in an emailed statement Monday. “We continue to be in active negotiations with the landlord about WeWork’s future at this location.”&nbsp;

<a href="https://www.wework.com/newsroom/a-letter-from-weworks-ceo-on-the-next-phase-of-wework" target="_blank" rel="noreferrer noopener">In a public letter last month</a>, CEO David Tolley wrote the company would “renegotiate nearly all [its] leases” to right-size its property portfolio. At the end of 2022, WeWork had 779 locations globally.

<a href="https://www.wework.com/newsroom/a-letter-from-weworks-ceo-on-the-next-phase-of-wework" target="_blank" rel="noreferrer noopener">In a public letter last month</a>, CEO David Tolley wrote the company would “renegotiate nearly all [its] leases” to right-size its property portfolio. At the end of 2022, WeWork had 779 locations globally.

“As part of these negotiations, we expect to exit unfit and underperforming locations and to reinvest in our strongest assets as we continuously improve our product,” wrote Tolley, who was made the permanent WeWork CEO this month <a href="https://www.bisnow.com/national/news/coworking/sandeep-mathrani-wework-ceo-departure-119004" target="_blank" rel="noreferrer noopener">after the sudden exit</a> of Sandeep Mathrani.

“As part of these negotiations, we expect to exit unfit and underperforming locations and to reinvest in our strongest assets as we continuously improve our product,” wrote Tolley, who was made the permanent WeWork CEO this month <a href="https://www.bisnow.com/national/news/coworking/sandeep-mathrani-wework-ceo-departure-119004" target="_blank" rel="noreferrer noopener">after the sudden exit</a> of Sandeep Mathrani.

Issues with WeWork’s financial position spell more trouble for <a href="https://sfstandard.com/2022/09/06/san-francisco-braces-for-epic-commercial-real-estate-crash/">a commercial real estate market</a> already reeling from high borrowing costs and record vacancies, leading to a growing number of property owners <a href="https://sfstandard.com/search/?query=default">defaulting on their debts</a>.&nbsp;

San Francisco braces for epic commercial real estate crash

Issues with WeWork’s financial position spell more trouble for <a href="https://sfstandard.com/2022/09/06/san-francisco-braces-for-epic-commercial-real-estate-crash/">a commercial real estate market</a> already reeling from high borrowing costs and record vacancies, leading to a growing number of property owners <a href="https://sfstandard.com/search/?query=default">defaulting on their debts</a>.&nbsp;

This lawsuit is the latest development in what has been an especially challenging year for WeWork. The company has seen a number of lawsuits over rent payments and defaults on loans, departures of top executives and rapidly tanking stock value. (WeWork’s stock currently sits at just under $2 a share, a nearly 97% drop from the start of the year.)&nbsp;

This lawsuit is the latest development in what has been an especially challenging year for WeWork. The company has seen a number of lawsuits over rent payments and defaults on loans, departures of top executives and rapidly tanking stock value. (WeWork’s stock currently sits at just under $2 a share, a nearly 97% drop from the start of the year.)&nbsp;

Property owners of WeWork’s 515 Folsom St. location sued the coworking company in January for more than $500,000 in past and future rent. In June, <a href="https://www.bizjournals.com/sanfrancisco/news/2023/07/19/s-f-office-tower-wework-foreclosure-lawsuit.html" target="_blank" rel="noreferrer noopener">lenders pushed to foreclose WeWork</a>’s 600 California St. space after it allegedly fell behind on a $240 million loan.

Property owners of WeWork’s 515 Folsom St. location sued the coworking company in January for more than $500,000 in past and future rent. In June, <a href="https://www.bizjournals.com/sanfrancisco/news/2023/07/19/s-f-office-tower-wework-foreclosure-lawsuit.html" target="_blank" rel="noreferrer noopener">lenders pushed to foreclose WeWork</a>’s 600 California St. space after it allegedly fell behind on a $240 million loan.

Meanwhile, WeWork’s president and chief operating officer, Anthony Yazbeck, departed earlier this week, which he stated was not a result of conflicting ideas about the company’s operations or strategy.

Meanwhile, WeWork’s president and chief operating officer, Anthony Yazbeck, departed earlier this week, which he stated was not a result of conflicting ideas about the company’s operations or strategy.

WeWork sued for $250 million as it exits massive downtown San Francisco office leases

Among the recognizable faces sitting courtside at Warriors games — E-40, team owner Joe Lacob, Apple’s Eddy Cue — there’s at least one guy you probably haven’t noticed. Glasses. Curly hair. Sometimes wearing an “Everybody but Buddy” sweater. He has a prime spot next to Draymond Green at the end of the bench.&nbsp;

Among the recognizable faces sitting courtside at Warriors games — E-40, team owner Joe Lacob, Apple’s Eddy Cue — there’s at least one guy you probably haven’t noticed. Glasses. Curly hair. Sometimes wearing an “Everybody but Buddy” sweater. He has a prime spot next to Draymond Green at the end of the bench.&nbsp;

His name is Brandon Shorenstein, and the 39-year-old is chairman and CEO of one of the most powerful San Francisco real estate dynasties ever created: Shorenstein Properties. His grandfather, Walter, built the company from scratch and at one point owned a quarter of the city’s offices. In the 1990s, Brandon’s father Douglas took over and supercharged the business, expanding it into a national empire.&nbsp;

His name is Brandon Shorenstein, and the 39-year-old is chairman and CEO of one of the most powerful San Francisco real estate dynasties ever created: Shorenstein Properties. His grandfather, Walter, built the company from scratch and at one point owned a quarter of the city’s offices. In the 1990s, Brandon’s father Douglas took over and supercharged the business, expanding it into a national empire.&nbsp;

Douglas might still be in charge today, but in 2015, he died of pancreatic cancer at the age of 60, fast-tracking Brandon, then still in his 20s, to the company’s top job. In 2020, he was named CEO. Then, the walls started caving in.&nbsp;

Douglas might still be in charge today, but in 2015, he died of pancreatic cancer at the age of 60, fast-tracking Brandon, then still in his 20s, to the company’s top job. In 2020, he was named CEO. Then, the walls started caving in.&nbsp;

The very same downtown skyscrapers that built the family’s fortune became burdens on the balance sheet. Since the pandemic, <a href="https://www.bisnow.com/national/news/capital-markets/shorenstein-defaults-mount-as-office-tenants-flee-124681">nearly $1 billion in loans</a> the company took out to fuel its real estate purchases during the previous decade have come under distress, creating massive losses for the firm and its investors. In a sign that things had reached an inflection point internally, the company in January cut <a href="https://www.bizjournals.com/sanfrancisco/news/2025/01/16/shorenstein-layoffs-debt-commercial-real-estate.html">about 10% of its workforce</a>, including six senior executives — its largest layoff ever.&nbsp;

The very same downtown skyscrapers that built the family’s fortune became burdens on the balance sheet. Since the pandemic, <a href="https://www.bisnow.com/national/news/capital-markets/shorenstein-defaults-mount-as-office-tenants-flee-124681">nearly $1 billion in loans</a> the company took out to fuel its real estate purchases during the previous decade have come under distress, creating massive losses for the firm and its investors. In a sign that things had reached an inflection point internally, the company in January cut <a href="https://www.bizjournals.com/sanfrancisco/news/2025/01/16/shorenstein-layoffs-debt-commercial-real-estate.html">about 10% of its workforce</a>, including six senior executives — its largest layoff ever.&nbsp;

Some of the largest buildings in the Shorensteins’ portfolio have been offloaded at major discounts or simply seized by lenders. The 62-story Aon Tower in Los Angeles sold for 45% less than its purchase price. The company surrendered the keys to the Capella Tower, the second-tallest skyscraper in Minneapolis. And 1407 Broadway in New York went into foreclosure after Shorenstein defaulted on a $350-million loan.&nbsp;

Some of the largest buildings in the Shorensteins’ portfolio have been offloaded at major discounts or simply seized by lenders. The 62-story Aon Tower in Los Angeles sold for 45% less than its purchase price. The company surrendered the keys to the Capella Tower, the second-tallest skyscraper in Minneapolis. And 1407 Broadway in New York went into foreclosure after Shorenstein defaulted on a $350-million loan.&nbsp;

The list goes on: firesales or seizures in Philadelphia, Chicago, Houston, Denver, and Seattle. In San Francisco, lenders took control of a family asset at 208 Utah St. and have agreed to sell the debt to local firm Redco Development, according to sources familiar with the pending deal. Meanwhile, one of Walter’s favorite downtown jewels, 45 Fremont, is also being marketed by lenders for sale after Shorenstein Properties and its partner defaulted on a $347-million loan.&nbsp;

The list goes on: firesales or seizures in Philadelphia, Chicago, Houston, Denver, and Seattle. In San Francisco, lenders took control of a family asset at 208 Utah St. and have agreed to sell the debt to local firm Redco Development, according to sources familiar with the pending deal. Meanwhile, one of Walter’s favorite downtown jewels, 45 Fremont, is also being marketed by lenders for sale after Shorenstein Properties and its partner defaulted on a $347-million loan.&nbsp;

Shorenstein's pre-pandemic real estate deals

sf-standard/datawrapper-chart

“I’m getting my ass kicked every day,” Shorenstein told another real estate executive last year, according to a report by the Wall Street Journal.&nbsp;

“I’m getting my ass kicked every day,” Shorenstein told another real estate executive last year, according to a report by the Wall Street Journal.&nbsp;

He’s not alone. Albert Behler, 73, of Paramount Group, <a href="https://sfstandard.com/2025/03/05/paramount-group-san-francisco-big-debts-come-due/">bet big on San Francisco skyscrapers and lost</a>. His company is now <a href="https://www.wsj.com/business/c-suite/major-office-landlord-is-exploring-a-sale-of-the-company-794701e3">exploring a sale</a>. Aby Rosen, 65, <a href="https://sfstandard.com/2025/01/21/san-francisco-homeless-hotel-millions-damages/">abandoned a San Francisco hotel after taking public money</a> and recently ceded New York City’s iconic Chrysler Building to his lenders.&nbsp;

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He’s not alone. Albert Behler, 73, of Paramount Group, <a href="https://sfstandard.com/2025/03/05/paramount-group-san-francisco-big-debts-come-due/">bet big on San Francisco skyscrapers and lost</a>. His company is now <a href="https://www.wsj.com/business/c-suite/major-office-landlord-is-exploring-a-sale-of-the-company-794701e3">exploring a sale</a>. Aby Rosen, 65, <a href="https://sfstandard.com/2025/01/21/san-francisco-homeless-hotel-millions-damages/">abandoned a San Francisco hotel after taking public money</a> and recently ceded New York City’s iconic Chrysler Building to his lenders.&nbsp;

But the Shorenstein name means more in San Francisco. Brandon’s grandmother <a href="https://www.nytimes.com/1994/06/24/obituaries/phyllis-shorenstein-76-patron-of-asian-arts-in-san-francisco.html">founded the Asian Art Museum</a>. His aunt <a href="https://www.sfgate.com/magazine/article/Second-Acts-San-Francisco-s-Carole-Shorenstein-2639255.php">owns the Curran Theater</a>. His dad <a href="https://www.frbsf.org/research-and-insights/blog/community-development/2015/11/25/remembering-douglas-w-shorenstein/">chaired the San Francisco Fed</a>. His grandfather <a href="https://www.upi.com/Archives/1993/01/14/Giants-sale-finalized/5746359782006/">even helped keep the Giants in town</a> when they considered relocating in 1993.

But the Shorenstein name means more in San Francisco. Brandon’s grandmother <a href="https://www.nytimes.com/1994/06/24/obituaries/phyllis-shorenstein-76-patron-of-asian-arts-in-san-francisco.html">founded the Asian Art Museum</a>. His aunt <a href="https://www.sfgate.com/magazine/article/Second-Acts-San-Francisco-s-Carole-Shorenstein-2639255.php">owns the Curran Theater</a>. His dad <a href="https://www.frbsf.org/research-and-insights/blog/community-development/2015/11/25/remembering-douglas-w-shorenstein/">chaired the San Francisco Fed</a>. His grandfather <a href="https://www.upi.com/Archives/1993/01/14/Giants-sale-finalized/5746359782006/">even helped keep the Giants in town</a> when they considered relocating in 1993.

Now, the scion of that dynasty is trying to reverse the backslide amid an unprecedented commercial real estate downturn that has left more than a third of the office buildings in San Francisco empty. Rather than wait around, other business leaders have <a href="https://sfstandard.com/opinion/2025/03/25/can-a-shiny-squad-of-ceos-really-help-sf-get-its-groove-back/">stepped into political advocacy</a>, <a href="https://sfstandard.com/2024/10/31/sf-election-2024-prop-m/">passing sweeping business tax reform</a> through Proposition M. Developers lobbied<a href="https://sfstandard.com/2024/09/15/sf-is-cutting-deals-to-unfreeze-housing-but-developers-have-to-do-their-part-too/"> for permitting and zoning reform</a>, while pursuing fee deferrals to restart frozen projects.

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Now, the scion of that dynasty is trying to reverse the backslide amid an unprecedented commercial real estate downturn that has left more than a third of the office buildings in San Francisco empty. Rather than wait around, other business leaders have <a href="https://sfstandard.com/opinion/2025/03/25/can-a-shiny-squad-of-ceos-really-help-sf-get-its-groove-back/">stepped into political advocacy</a>, <a href="https://sfstandard.com/2024/10/31/sf-election-2024-prop-m/">passing sweeping business tax reform</a> through Proposition M. Developers lobbied<a href="https://sfstandard.com/2024/09/15/sf-is-cutting-deals-to-unfreeze-housing-but-developers-have-to-do-their-part-too/"> for permitting and zoning reform</a>, while pursuing fee deferrals to restart frozen projects.

Brandon, meanwhile, hasn’t taken on the public mantle of a civic leader like his forefathers did. He’s also made mistakes during this tenure as CEO, opting to continue purchasing office buildings during the initial years of the pandemic, setting the company back even further.&nbsp;

Brandon, meanwhile, hasn’t taken on the public mantle of a civic leader like his forefathers did. He’s also made mistakes during this tenure as CEO, opting to continue purchasing office buildings during the initial years of the pandemic, setting the company back even further.&nbsp;

NEW YORK, NY - OCTOBER 23:  Brandon Shorenstein and Danielle Snyder attend the celebration of the 10 Year Anniversary of DANNIJO at Le Turtle on October 23, 2018 in New York City.  (Photo by Manny Carabel/Getty Images)

<figure class="wp-block-image size-large"><img height="2500" width="1667" src="https://content.sfstandard.com/wp-content/uploads/2025/05/gettyimages-1052862904-e1748296909189.jpg?w=683" alt="A man in glasses and a gray jacket stands with a smiling woman in a black dress and jewelry, posing closely together inside a room with wooden panels." class="wp-image-403651"/><figcaption class="wp-element-caption">Brandon Shorenstein, seen in 2018 with wife Danielle Snyder, took over his family&#8217;s real estate empire at age 34.</figcaption></figure>

<figure class="wp-block-image size-large"><img src="https://content.sfstandard.com/wp-content/uploads/2025/05/gettyimages-1052862904-e1748296909189.jpg?w=683" alt="A man in glasses and a gray jacket stands with a smiling woman in a black dress and jewelry, posing closely together inside a room with wooden panels." class="wp-image-403651"/><figcaption class="wp-element-caption">Brandon Shorenstein, seen in 2018 with wife Danielle Snyder, took over his family's real estate empire at age 34.</figcaption></figure>

<figure class="wp-block-image size-large"><img src="https://content.sfstandard.com/wp-content/uploads/2025/05/gettyimages-1052862904-e1748296909189.jpg?w=683" alt="A man in glasses and a gray jacket stands with a smiling woman in a black dress and jewelry, posing closely together inside a room with wooden panels." class="wp-image-403651"/><figcaption class="wp-element-caption">Brandon Shorenstein, seen in 2018 with wife Danielle Snyder, took over his family&#8217;s real estate empire at age 34.</figcaption></figure>

Shorenstein declined through a spokesperson to comment on this story. To get an understanding of what led to the company’s current state and its prospects of recovery, The Standard spoke to a dozen real estate sources who have dealt with him and his family over the decades and are privy to the firm’s internal dynamics. They requested anonymity in order to speak candidly.&nbsp;

Shorenstein declined through a spokesperson to comment on this story. To get an understanding of what led to the company’s current state and its prospects of recovery, The Standard spoke to a dozen real estate sources who have dealt with him and his family over the decades and are privy to the firm’s internal dynamics. They requested anonymity in order to speak candidly.&nbsp;

“Unfortunately for Brandon, he gets criticized twice in this economy,” said the leader of another prominent San Francisco real estate firm. “Once for the mistakes his predecessors made, and again, when he does not speak up or take responsibility.”&nbsp;

“Unfortunately for Brandon, he gets criticized twice in this economy,” said the leader of another prominent San Francisco real estate firm. “Once for the mistakes his predecessors made, and again, when he does not speak up or take responsibility.”&nbsp;

<h2 class="wp-block-heading" id="h-walter-and-douglas-shadow">Walter and Douglas’ shadow</h2>

For someone whose family business is on a precipice, Shorenstein is remarkably hard to pin down, according to industry sources. If any broker, investor, or developer needs to steal some face time, they might have to go to see him at Chase Center or on the back nine at the Meadow Club, a Marin County country club at the foot of Mt. Tamalpais.&nbsp;

For someone whose family business is on a precipice, Shorenstein is remarkably hard to pin down, according to industry sources. If any broker, investor, or developer needs to steal some face time, they might have to go to see him at Chase Center or on the back nine at the Meadow Club, a Marin County country club at the foot of Mt. Tamalpais.&nbsp;

“I think he works hard and is handling this as well as he can, but what else is he known for at this point?” asked someone who considers Shorenstein a friend.

“I think he works hard and is handling this as well as he can, but what else is he known for at this point?” asked someone who considers Shorenstein a friend.

In a rare media appearance in the <a href="https://www.wsj.com/real-estate/commercial/shorenstein-office-buildings-investment-eb88dd8a">Wall Street Journal last month</a>, Shorenstein said that he now sees new opportunities to capitalize on a down market. “Any investment we made before two and a half years ago isn’t looking great,” Shorenstein told the Journal. “Whereas any investment we made in the past two and a half years is going to look very good.”

In a rare media appearance in the <a href="https://www.wsj.com/real-estate/commercial/shorenstein-office-buildings-investment-eb88dd8a">Wall Street Journal last month</a>, Shorenstein said that he now sees new opportunities to capitalize on a down market. “Any investment we made before two and a half years ago isn’t looking great,” Shorenstein told the Journal. “Whereas any investment we made in the past two and a half years is going to look very good.”

A pedestrian looks at a boarded-up window (2nd column from left near the top) after the glass of the iconic Bank of America fell on Kearny Street during a severe wind storm on Tuesday, March 14. Another window cracked on the iconic Bank of America building: Wednesday, March 15, 2023, in San Francisco, Calif. | Paul Kuroda for The Standard

<figure class="wp-block-image alignwide size-large"><img src="https://content.sfstandard.com/wp-content/uploads/2023/03/SOCIAL2-555CaliforniaWindows03052023168-2.jpg?w=2048" alt="A person looks up at a towering skyscraper with mirrored windows, reflecting the clear blue sky above." class="wp-image-139355"/><figcaption class="wp-element-caption">Walter Shorenstein once set the record for the largest office sale ever completed, at 555 California St.</figcaption></figure>

A person walks by the old Strava headquarters at Utah and 15th streets in San Francisco on Wednesday, March 5, 2025. Strava is opening the doors to its brand-new global headquarters in San Francisco. HQ celebrates Strava’s global presence and the universality of sport by featuring meeting rooms named after some of the most beloved segments around the world like Alpe d’Huez and Mount Tam, bibs from local and global races the team has been a part of and artwork from world-class sporting events to pay homage to athleticism and sportsmanship.

<figure class="wp-block-image alignwide size-large"><img src="https://content.sfstandard.com/wp-content/uploads/2025/03/8566320600_metastrava02.jpg?w=2000" alt="A large brick building houses several companies, including Strava and WB Games, as indicated by signs. Trees line the street along parked cars." class="wp-image-374945"/><figcaption class="wp-element-caption">Even peripheral assets owned by Shorenstein are being seized. This office at 208 Utah is expected to be sold to Redco Development.</figcaption></figure>

He was later teased by some industry peers for posing for the paper wearing an $80,000 watch. “There’s a little bit of schadenfreude going around for sure,” quipped a developer after the story came out. “I mean, grandson potentially pissing it all away? C’mon.”&nbsp;

He was later teased by some industry peers for posing for the paper wearing an $80,000 watch. “There’s a little bit of schadenfreude going around for sure,” quipped a developer after the story came out. “I mean, grandson potentially pissing it all away? C’mon.”&nbsp;

That reputation is a far cry from the one his grandfather developed. Walter came to San Francisco after World War II and built his fortune by being the go-to broker for some of the city’s elite of the time, including the Bechtel and Swig families and companies like IBM and Metropolitan Life.&nbsp;

That reputation is a far cry from the one his grandfather developed. Walter came to San Francisco after World War II and built his fortune by being the go-to broker for some of the city’s elite of the time, including the Bechtel and Swig families and companies like IBM and Metropolitan Life.&nbsp;

Eventually, some of those clients would end up bankrolling Walter as he developed and/or purchased his own downtown skyscrapers, such as 555 California. Along the way, he became an influential Democratic Party donor who influenced mayors and advised presidents.&nbsp;

Eventually, some of those clients would end up bankrolling Walter as he developed and/or purchased his own downtown skyscrapers, such as 555 California. Along the way, he became an influential Democratic Party donor who influenced mayors and advised presidents.&nbsp;

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“Walter was a tough SOB,” recalled one former Shorenstein employee who worked with him in the 1980s. “He ruled that company with an iron fist and behaved in a way that would absolutely be considered archaic today.”&nbsp;

“Walter was a tough SOB,” recalled one former Shorenstein employee who worked with him in the 1980s. “He ruled that company with an iron fist and behaved in a way that would absolutely be considered archaic today.”&nbsp;

By the time the 1990s arrived, Walter’s son Douglas, a relatively calmer presence, took over and put his own spin on the business by pursuing investors outside of his father’s circle. In 1993, he started the first Shorenstein Realty Investors fund, where he recruited college endowments, large foundations, and wealthy individuals like Tom Steyer to invest with the company in real estate around the nation.&nbsp;

By the time the 1990s arrived, Walter’s son Douglas, a relatively calmer presence, took over and put his own spin on the business by pursuing investors outside of his father’s circle. In 1993, he started the first Shorenstein Realty Investors fund, where he recruited college endowments, large foundations, and wealthy individuals like Tom Steyer to invest with the company in real estate around the nation.&nbsp;

Shorenstein Properties would chip in about 10% of its own money into the fund and invited employees to join in as well. This strategy, which is now more commonplace, pushed the company to new heights and added to the Shorensteins’ clout. They would roll out a new version of the fund almost every year until 2022, eventually totaling more than $10 billion in investment.&nbsp;

Shorenstein Properties would chip in about 10% of its own money into the fund and invited employees to join in as well. This strategy, which is now more commonplace, pushed the company to new heights and added to the Shorensteins’ clout. They would roll out a new version of the fund almost every year until 2022, eventually totaling more than $10 billion in investment.&nbsp;

Shorenstein real estate funds raised by year

During his tenure, Douglas preferred to target Class A office buildings that were near or fully leased; but as time passed, and investors demanded higher returns, the company’s buying strategy got riskier and more speculative, said a source with direct knowledge of the business.&nbsp;

During his tenure, Douglas preferred to target Class A office buildings that were near or fully leased; but as time passed, and investors demanded higher returns, the company’s buying strategy got riskier and more speculative, said a source with direct knowledge of the business.&nbsp;

If things broke right, the high-wire act paid off handsomely. That was the case in 2015, when the company sold a former furniture showroom at 1355 Market St. in San Francisco’s <a href="https://sfstandard.com/2024/05/02/the-mid-market-faithful-life-inside-san-franciscos-office-dead-zone/">troubled Mid-Market</a> for double the amount it had invested in the property after it was transformed and leased to Twitter. Shorenstein stayed on as property and leasing manager and continued collecting fees.&nbsp;

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If things broke right, the high-wire act paid off handsomely. That was the case in 2015, when the company sold a former furniture showroom at 1355 Market St. in San Francisco’s <a href="https://sfstandard.com/2024/05/02/the-mid-market-faithful-life-inside-san-franciscos-office-dead-zone/">troubled Mid-Market</a> for double the amount it had invested in the property after it was transformed and leased to Twitter. Shorenstein stayed on as property and leasing manager and continued collecting fees.&nbsp;

After Douglas died, this business model continued under the stewardship of one of his top lieutenants, Charlie Malet, a controversial figure within and outside the company because of his abrasive personality.

After Douglas died, this business model continued under the stewardship of one of his top lieutenants, Charlie Malet, a controversial figure within and outside the company because of his abrasive personality.

By the turn of the decade, when Brandon finally ascended to CEO, the Shorenstein portfolio was as big and successful as it had ever been.&nbsp;

By the turn of the decade, when Brandon finally ascended to CEO, the Shorenstein portfolio was as big and successful as it had ever been.&nbsp;

“How much of that was skill though?” said a veteran office broker. “How much of it was actually just an overheated market?”&nbsp;

“How much of that was skill though?” said a veteran office broker. “How much of it was actually just an overheated market?”&nbsp;

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