Remember when Juul was supposed to be the future? The e-cigarette company dropped $220 million on a 29-story tower at 123 Mission Street back in 2019, promising to make it their shiny new San Francisco headquarters. Turns out, that future never showed up.

The whole thing went sideways almost immediately. The same month Juul closed on the building in summer 2019, the Board of Supervisors was already calling them out for targeting kids in their advertising. State lawsuits and federal investigations piled on shortly after. Rather than deal with the controversy head-on, Juul just ghosted San Francisco entirely, and never actually moved into the offices.

For years, the massive 363,000-square-foot building sat there looking like the real estate equivalent of a abandoned relationship. Now, finally, someone’s picking up the pieces.

A New York-based firm called Madison Capital just reached a deal to buy the debt attached to the building (and likely take control of it), partnering with a subsidiary of Prudential Financial to make it happen. Here’s where it gets messy: they’re expecting to purchase the whole thing through a “deed in lieu of foreclosure”, basically a legal way of saying “we’re taking this off your hands without dragging you through foreclosure court”, for somewhere in the low $90 million range. That’s a 75% discount on what Juul originally paid. Yikes.

While no official default notices were ever filed, it’s pretty clear Juul fell behind on payments or straight-up decided not to pay back that $220 million loan from Affinius Capital. The company isn’t commenting on any of this.

Right now, the building is only 13% leased out. Real estate listings are trying to attract a single major tenant who could take up the whole space (the way Juul originally planned), but if that doesn’t happen, each floor breaks down to about 16,000 square feet. The lobby did get a 2010 renovation by Gensler, so at least there’s that.

Madison Capital is actually pretty new to San Francisco’s commercial real estate market, which has been hit hard since the pandemic tanked property values across the city. Interestingly, they’re also eyeing another distressed skyscraper at 45 Fremont Street, so this might be part of a bigger strategy to scoop up struggling downtown properties.

The whole situation basically shows what happens when a company gets absolutely roasted by regulators and decides to bail instead of fighting back. Juul’s legacy in San Francisco isn’t some sleek office tower full of employees, it’s a half-empty building getting sold off for pennies on the dollar.