Phelan Building Owner Defaults on $215M Loan

The landmark 780 Market St. tower faces foreclosure as its owner misses loan payments tied to AIG.

Updated on Nov. 4, 2026 in Commercial

Photograph of the upper facade of a tall cream-and-gray office tower with rows of windows and a stepped crown under a pale overcast sky. — The owner of San Francisco's landmark Phelan Building at 780 Market St. defaulted on a $215 million loan, and AIG is moving to foreclose on the property. AI Illustration. Upload story photo >

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The owner of the 11-story Phelan Building at 780 Market St. was issued a notice of default at the end of October for failing to make payments on a $215 million loan. AIG is seeking to foreclose on the property, and $192 million is owed on the loan.

Why it matters

The default puts one of San Francisco's landmark commercial buildings at risk of auction, with a large retail space already vacant since 2021. The outcome could affect the building's tenants and the Market Street corridor.

The building, constructed in 1908, stands 11 stories and includes about 52,000 square feet of retail space. The Hotung-linked owner bought it in 2016 for $374 million, and the foreclosure outcome has not been determined.

The players

AIG

AIG is a major American insurance and financial services company that holds the $215 million loan and is seeking to foreclose on the Phelan Building.

Thor Equities

Thor Equities is a New York-based real estate developer that sold the Phelan Building to the Hotung-linked company in 2016.

The details

Phelan Building LLC, linked to Patrick and Ellen Hotung, controls the property through a Buffalo, New York-based commercial real estate firm with holdings in Manhattan, Chicago, and Denver. The building still houses a Verizon store and a Little Sweet outpost, while Figma has leased several floors since spring 2024.

2016: Hotung-linked company purchased the building for $374 million.
2021: Marshalls moved out of the largest retail space.
Spring 2024: Figma began leasing several floors.
End of October 2026: Notice of default issued for missed loan payments.

Market Landscape

The 2016 sale of the Phelan Building by Thor Equities for $374 million set a high valuation benchmark for the property. The current loan default suggests that the building's value and income have not kept pace with that purchase price.

Tenants and visitors along Market Street could see changes in building management or occupancy if the property is sold at auction. Shoppers may also notice the continued vacancy of the largest retail space.

The takeaway

Distressed sales of landmark buildings can reshape commercial neighborhoods, so changes in ownership are worth watching for businesses and residents along the corridor.