SF Office Loan Matured in July as Largest Tenant Leaves

A $28.2 million loan on a 64,554-square-foot San Francisco office building moved to special servicing in February after the borrower told the master servicer it could not pay off the loan at its July 1, 2026 maturity. The details come from the October servicer report for DBJPM 2016-C3 Mortgage Trust, filed October 26. The filing does not give the building’s address.

Why it matters

Small and mid-size office is where refinancing gaps show first. The loan balance is above the April 14, 2026 appraisal of $27.4 million, so a payoff at appraised value would leave the loan short. Lenders, brokers and buyers of sub-100,000-square-foot buildings can use it as a data point on how a servicer prices a building with a falling tenant roster.

The numbers

The servicer says the largest tenant, Swinerton, occupies 34,952 square feet and plans to leave when its lease expires September 30, 2026, which would take occupancy to 39 percent. The borrower signed two new leases totaling 12,655 square feet that start in September and October 2026. Net operating income was $2.3 million and the debt service coverage ratio was 1.94 as of June 30, 2026, before the departure shows up in the figures.

What’s next

The comment says a loan modification is scheduled to close in October 2026, and that the borrower continues to market the vacant space. These are servicer statements. A closed modification would appear in the next monthly report’s modified loan detail, and the leasing pace over the next two quarters will decide whether 39 percent occupancy holds. For more, see the San Francisco market hub.