Key parts of Sacks’ scenario did not materialize by late 2025, even though downtown San Francisco’s office market has been extremely distressed.

What did happen:

• San Francisco’s downtown office market suffered record vacancies (mid‑30% range) and very steep value declines, with some distressed buildings appraised 20–84% below prior values and vacancy topping 35%(therealdeal.com)(therealdeal.com).
• A number of specific properties defaulted and/or went to foreclosure or auction, including Mid‑Market office towers like 995 Market St. (sold at ~90% discount after a loan default)(sfgate.com), 1019 Market (former Zendesk HQ) heading to foreclosure auction(therealdeal.com), and Union Square offices at 222 Kearny & 180 Sutter scheduled for foreclosure auction after loan negotiations failed(svnordicbeat.com).
• The city’s largest downtown mall, San Francisco Centre, was foreclosed on in 2025; lenders used a credit bid to take control at about $133M, down from a >$1.2B valuation less than a decade prior(sfstandard.com).

Where the prediction breaks down:

1. “All of downtown…owned by a bunch of banks” / “large portion…repossessed by banks”

   • While defaults and special servicing surged, the pattern has largely been distressed sales and loan trades, not a wholesale shift of tower ownership into bank REO. CBRE data show that in 2024, 23 downtown office buildings sold for $916M, more than doubling the transaction count of the prior two years combined(sfchronicle.com)—i.e., properties were changing hands to new private and institutional owners, not simply sitting as bank‑owned stock.
   • CoStar/KBRA analysis highlights that roughly 35% of San Francisco CMBS office loans became distressed(therealdeal.com), but “distressed loans” are typically in workout or sold to investors; they do not imply that a large share of towers have actually been repossessed and held by banks.
   • Many marquee towers remain owned by long‑term institutional owners who refinanced or paid off loans, such as 345 California, where the owner fully paid off a $150M loan and now owns the tower free of that debt(costar.com)—the opposite of lender seizure.

2. “Fire sale…auctions at rock bottom prices” with “no buyers” / very limited demand

   • There have indeed been fire‑sale prices: e.g., 995 Market St. trading for $6.5M vs. ~$62M in 2016(sfgate.com), and multiple downtown towers such as 60 Spear, 350 California, and 550 California changing hands at 60–75% discounts from prior or asking values(sfstandard.com).
   • However, those deals did attract buyers—often well‑capitalized investors explicitly hunting for bargains and willing to take leasing risk. The “boomerang buys” on California Street and Spear Street are framed as investors betting long on the city at deep discounts(sfstandard.com), and follow‑up reporting shows new owners signing multiple new leases at 550 California(sfstandard.com).
   • Market data show that 2024 marked a bottoming and re‑acceleration of buyer activity: CBRE found average sale prices increasing from $253/sf in 2023 to $310/sf in 2024, with transaction volume in 2024 exceeding 2022 and 2023 combined, and much of it involving distressed assets being purchased by wealthy buyers and institutions(sfchronicle.com). MarketWatch similarly describes 2024 as a turning point, with steep discounts but renewed investor and lender interest and more properties trading hands(marketwatch.com). That pattern is inconsistent with “no buyers.”
   • High‑profile examples of distressed‑but‑purchased assets include:
     • Market Center towers: investors Greg Flynn and DRA Advisors took over the distressed $417M mortgage for about $177M, acquiring the two‑tower complex in the largest SF office deal since 2022(bloomberg.com).
     • 353 Sacramento St.: New York Life and Lincoln Property bought a distressed $101.6M loan at a 63% discount to the prior purchase price, effectively stepping into ownership at a low basis(sfstandard.com).
     • 199 Fremont / 300 Howard: DivcoWest and Blackstone acquired the vacant 25‑story tower for about $111M, far below earlier valuations, and are repositioning it for AI‑oriented tenants(en.wikipedia.org)(sfchronicle.com).
   • Even the foreclosed San Francisco Centre mall was taken over via lender credit bid and promptly given to CBRE to market for resale(sfstandard.com)—again indicating an expectation of buyers at the right price, not a market with “no buyers.”

Overall:

• Sacks correctly anticipated severe distress, major value write‑downs, and some foreclosure/auction activity in downtown San Francisco’s commercial real estate. Those elements are clearly visible in the record vacancies, massive appraisal cuts, and a handful of high‑profile foreclosures and auctions(therealdeal.com)(therealdeal.com).
• But the central thesis—that a large portion of downtown office towers would end up owned by banks and dumped in auctions with little or no buyer demand—does not match observed outcomes. Distress has translated primarily into discounted sales and loan trades to opportunistic private and institutional buyers, with transaction volume and investor interest actually rising at the bottom, not evaporating(sfchronicle.com)(marketwatch.com).

Because the core mechanism (widespread bank repossession plus a buyerless auction market) failed to materialize, the prediction is best characterized as wrong, albeit directionally right about stress and price collapses in the downtown San Francisco office sector.