Tishman-Speyer is putting its 727,000 sq. ft. Market Center office building on the market after defaulting on its loan. The loan default marks the first distressed sale of a property in the San Francisco market, where tremors of the dot-com bust more than two years ago can still be felt. Tishman Speyer and partner Travelers Insurance purchased the two-tower Market Center complex three years ago for $189 million.

In 2000, Tishman Speyer and Travelers secured a $160 million mortgage loan from Morgan Stanley. At that time, the property was appraised at $250 million. But when the buildings’ combined vacancy rate spiked to more than 80% last year following the exit of major tenant Chevron Corp., Tishman Speyer was unable to make a balloon payment on the loan’s maturity date earlier this month. A broker has not yet been chosen to market the building.

According to a Tishman spokesperson, the firm will retain ownership of the building while it's being sold.

The Market Center complex consists of a 22-story tower at 555 Market Street and a 40-story tower at 575 Market Street.