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Downtown San Francisco’s 660 Market St. has a new owner.

San Francisco-based investor Long Market Property Partners took ownership of the roughly 40,000-square-foot office and retail property Monday, less than a week after acquiring a $22 million loan backed by 660 Market St. from Fortress Investment Group.

New York-based investment manager Fortress quietly bought the $22 million loan from lender Truist for an undisclosed price in February. The firm, which had $48 billion in assets under management at the close of 2023, said earlier this year it acquired some $1.5 billion in performing loans backed by US office properties at between 50 and 69 cents on the dollar.Fortress’s acquisition of the $22 million loan backed by 660 Market positioned the firm to take ownership of the building should its then-owner, Jamestown Properties, default on its loan or decide to surrender the property in lieu of foreclosure.

Fortress instead appears to have flipped the loan, selling to Long Market just ahead of Jamestown relinquishing ownership of 660 Market, public records show. The change in ownership took place through the deed-in-lieu process, according to a source familiar with the deal, sometimes called a “friendly foreclosure.”

Atlanta-based Jamestown said Wednesday it had reached a resolution with its lender and no longer owned the asset.

“We continue to actively manage our portfolio to produce the best possible outcomes for investors within the context of broader market conditions,” Jamestown spokesperson Lisa Serbaniewicz said in the statement.

The deal cements 660 Market St. as one of the latest downtown buildings to change hands in postpandemic San Francisco. Details of Fortress’s sale to Long Market, including the sale price, were not available Wednesday. Fortress did not respond to a request for comment about the deal, and Long Market declined to comment. It was not clear whether the pair may have already had an arrangement in the works when Fortress acquired the $22 million loan in February.

A market source familiar with Fortress’s thinking said the firm tends to “buy wholesale and sell retail.” It would not be unusual for Fortress to seek a return of around 20% from the sort of deal it appears to have Long Market, the source said, speaking on the condition of anonymity to preserve working relationships.

The loan flip highlights a kind of unique opportunity available for investors like Fortress in San Francisco. Acquiring loans at a steep enough discount provides Fortress an opportunity with some downside protection, its co-CEO Drew McKnight told CNBC in March, even as Fortress believes that real estate values can and will fall further.

San Francisco’s office market, though, has for now settled into post-pandemic pricing generally between $200 and $300 per square foot; it has seen growing demand over the last year from a pocket of largely local investors willing to bet on properties at “reset” prices.

Long Market emerged in San Francisco in the early 2010s, scooping up properties like 995 Market St., a 15-story tower in the city’s Mid-Market it acquired for $17 million alongside partner Columbia Pacific Advisors. The pair renovated 995 Market and leased the majority of it to WeWork before selling the building to New York-based investor Bridgeton for $62 million in 2016. (Bridgeton lost that building at a public auction this spring; its lenders bid just $6.56 million to foreclose upon the property.)

In April 2023, Long Market acquired a roughly 50,000-square-foot commercial property at 40 Jessie St. from Golden Gate University for $17.6 million, or just north of $350 per square foot.

Its acquisition of 660 Market St. officially takes the building off of former owner Jamestown’s hands. The firm acquired 660 Market for $40.4 million, or roughly $1,000 per square foot, in 2018.

The firm was served notices of default last year for two other downtown commercial properties it bought around the same time as 660 Market St.: 116 New Montgomery, a 135,500-square-foot building Jamestown will retain ownership of, and 731 Market St.

Jamestown and its lenders are said to be in talks to offload 731 Market to San Francisco-based TMG Partners, though that deal as of earlier this year was held up by complications with Jamestown’s existing debt on the property.

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