Lender-Owned Union Square Mall Property Is Under 7% Occupied

A super regional mall and office property in the Union Square Market is now lender-owned, and an October servicer report says physical occupancy is below 7 percent. The filing does not name the property, and we are not naming it here. It is a mixed-use asset of about 1.51 million square feet in two nine-story buildings, according to the servicer’s comment in a Form 10-D filed October 26 for CD 2016-CD1 Mortgage Trust.

Why it matters

For anyone watching downtown retail and office conversion, the servicer’s own words are stark. The comment says the lender completed foreclosure on November 12, 2025, that most tenants used co-tenancy clauses to terminate their leases after an anchor closed, and that the lender cured a default on the ground lease, which is now in good standing. CBRE is marketing the property for sale.

The numbers

The report carries a July 3, 2025 appraisal of $195 million and net operating income of negative $21.2 million, with a debt service coverage ratio of negative 4.42 as of March 31, 2026. This trust’s share of the loan shows a balance of $23.5 million. The same collateral also sits in DBJPM 2016-C3, which lists a $32.9 million balance; the loan is held across several trusts, so those balances should not be added together. The loan matured on August 1, 2026.

What’s next

The comment dated December 1, 2025 projected a sale in late first quarter 2026 and still appears in the October report. The report does not say a sale has closed. A completed sale would be recorded in the filing, and a buyer’s plan would set the tone for Union Square. For more regional coverage, see the San Francisco market hub.