Mark Allen Hanrahan was involved in several controversial real estate transactions while serving as Managing Director at Principal Real Estate Investors, one of which was 333 Market Street in San Francisco, owned at the time by Wells Fargo Bank.
In 2006, Principal acquired 333 Market Street for $370 million, a significant markup from the $150 million Wells Fargo had paid just months earlier. The deal was arranged through Wells Fargo subsidiary Eastdil Secured, raising concerns about potential asset inflation or internal collusion. At the time of it’s purchase, the entire 33 story structure was undergoing a major remodeling, the cost of which was likely paid for by the PUSPSA as well. Later, in 2010, Principal sold the property to a South Korean investment group, Hana Asset Management. Public reports listed the sale price as $333 million, but other sources suggested it was $516 million, leading to a $183 million discrepancy in transaction records. Additionally, inconsistencies in ownership documents indicated that the mailing address of the Korean-held private LLC matched the prior Principal-affiliated LLC, raising transparency concerns.
In 2015, Hanrahan was arrested on kidnapping charges related to drug-related criminal activity. He later pleaded guilty to carrying weapons while intoxicated and solicitation to commit a felony. As part of his sentence, he received two years of probation and a $1,375 civil penalty. Additionally, Hanrahan was issued a two-year no-contact order against the victim. His legal troubles raised concerns about his integrity during his tenure at Principal Real Estate Investors, where he had been involved in financial transactions that were later scrutinized for potential misrepresentation and fiduciary breaches.
Hanrahan’s criminal activity was widely published in Iowa based newspapers, and his executive position was promptly terminated by Principal. The controlling role he played in the management of billions of dollars of 401k investors was intentionally ignored by Principal and the press. But the glaring fact is that Hanrahan was involved in financial misrepresentation and fiduciary breaches during his tenure at Principal Real Estate Investors. Between 2008 and 2013, Principal engaged in questionable investment transactions, including acquiring 97.5% of PUSPSA’s commercial properties through off-market deals, private transactions, and repeat sellers. Additionally, Principal engaged in off-balance sheet transactions, obscuring financial risks to investors. The Principal U.S. Property Separate Account (PUSPSA) was reclassified as a fixed-income account in 2008, imposing withdrawal restrictions on 401(k) investors, effectively trapping funds within an underperforming asset pool. These methods raised concerns about fair market value assessments and fiduciary compliance.
These actions potentially violated multiple federal statutes, including:
- Employee Retirement Income Security Act (ERISA) violations related to mismanagement of retirement funds.
- Securities fraud due to fraudulent misrepresentation and non-disclosure of material financial risks.
- Corporate governance failures, particularly under Hanrahan’s supervision.
This spreadsheet further describes activities which took place during the five years in which the PUSPSA owned the property, as well as five years after ownership was passed on…333 MARKET STREET SPREADSHEET
