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5 Hawthorne Street is on the brink of foreclosure. According to the San Francisco Business Times, lenders plan to seize the property and place it under receivership. A lawsuit in San Francisco Superior Court claims that an affiliate of Los Angeles‑based CIM Group failed to make monthly payments on a $61.5 million loan secured by the building, defaulting since early August. The loan was transferred to special servicing in July, the same month Yelp’s 136,432‑sq‑ft lease was due to expire. Bondholders of the commercial mortgage‑backed securities were notified that the loan’s transfer was triggered by an “imminent default.” The servicer is now collecting data on the property and devising workout strategies aimed at maximizing net present value recovery.

    Should the foreclosure proceed, the lenders could auction the building and use the proceeds to repay the delinquent loan. Yelp has occupied 55 Hawthorne since 2014 and has been subleasing portions of its space even before the pandemic. After COVID, the company put its entire footprint up for sublease. Over the past decade, tenants such as NerdWallet and Motive occupied the space, but July correspondence indicated that most would vacate once Yelp’s master lease ends on July 31.

    CIM listed the property for sale in spring 2024, fearing a decline in value after Yelp’s departure, though no sale materialized. CIM purchased the building in 2016 for $123 million ($900 per square foot); its spring 2024 asking price was undisclosed. Facing a large vacancy, the company sought new tenants during the summer.