SAN JOSE — A big office building in San Jose is nearing a foreclosure proceeding and seizure by its lender, according to Santa Clara County property documents.
The office building at 10 West Tasman Drive in north San Jose has become delinquent on a loan from Copia Lending provided that totals $29 million, county real estate records show.
Now, real estate officials are pushing forward with a foreclosure proceeding this month to allow the property to be auctioned off to a bidder or returned to its lender to satisfy the unpaid debt.
A San Jose-based investment group whose executives include Doo Lee and Joon Kim owns the property, according to state business records.
The Bay Area office market is undergoing seismic shifts in the wake of the coronavirus.
Before the virus outbreak in 2020, the office market in the region was humming due to a robust appetite on the part of tech companies to find office spaces and property sites for their expansion. Biotech companies added to the leasing and buying frenzy.
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The onset of the pandemic, however, prodded state and local government agencies to impose significant business shutdowns to help curb the spread of the deadly virus.
At the same time, tech companies slashed their appetites for office space, trimmed their property footprints and embarked on layoffs.
Feeble office rents have eroded office building values and created an environment for loan defaults. Some experts believe the problems in the office market could persist through at least the end of 2024.
In 2022, the current owners of the 10 West Tasman building owners paid $30 million in 2022 for the property, including buying the structure and a ground lease for the land beneath the building, according to public real estate records.
The two-story building, located near the corner of West Tasman Drive and North First Street, totals 105,000 square feet. The office building is empty.
The foreclosure could occur if the borrower doesn’t pay off the mortgage.