SAN JOSE — A South Bay biotech firm has bought a big San Jose office and research building in a deal that could enable the life sciences firm to expand its local operations considerably.
Vibrant Wellness has bought an office and research building in north San Jose that flopped into foreclosure due to a delinquent loan earlier this year, according to documents filed on Sept. 27 with the Santa Clara County Recorder’s Office.
Santa Clara-based Vibrant Wellness paid $17.5 million for the building at 3100 North First Street in San Jose, the county records show.
Vibrant Wellness is a biotech company that has developed lab testing procedures to enable health and wellness providers to more readily and accurately identify the root causes of patient health issues.
To be sure, the Vibrant Wellness office purchase shows the Bay Area office market continues to flounder and that property values remain locked in a nosedive.
Still, the deal also demonstrates that the slump in values can make office buildings more attractive, including companies that intend to use the properties for their operations.
The building’s value as of January 2024 was $32.1 million, according to documents on file with the Santa Clara County Recorder’s Office.
However, as 2024 progressed, it became clear the building’s value had eroded badly.
East West Bank, which provided the loan for the building, placed a value of $19 million on the office property at the time it seized ownership of the site in May 2024.
The unpaid debt at that time was $25.8 million, the county records show.
The current $17.4 million price is 45.8% below the value that the Santa Clara County Assessor’s Office placed on the office building in January.
The latest price also is 8.4% below the lender’s estimated value for the property just last May.
The decline in value for a growing number of commercial properties could pose a real hazard for the coffers of cities, countries, school districts and other government agencies in the Bay Area.
Slumping values could trigger lower reassessments in the value of an array of properties.
This sort of dynamic, in turn, could squeeze the tax revenue that some – or even many – office, retail and hotel properties generate.
Yet the plunging value of the building, which totals 99,400 square feet, also provides a more enticing site for companies such as Vibrant Wellness to occupy.
The deal also leaves Vibrant Wellness poised to expand its operations with the San Jose building it now owns.
At present, Vibrant Wellness occupies a Santa Clara building that totals 34,300 square feet.
This means the north San Jose building the biotech company has just bought is about three times larger than the Santa Clara building where it now is located.
The purchase points to the flip side of slumping property values. The decline in the cost to own an office building can make such properties more enticing for owner users of such sites.
Vibrant Wellness also appears to have crafted an attractive purchase deal for the 3100 North First building beyond the price, the county records suggest.
East West Bank, whose affiliate seized the building a few months ago through the foreclosure, provided a real estate loan to Vibrant Wellness totaling slightly below $14.9 million at the time of the purchase.
The bank financed roughly 85% of the biotech firm’s property purchase. The financing also means Vibrant Wellness had to pony up only $2.5 million of its own money to complete the acquisition.
Vibrant Wellness says its analytics-based approach to testing is precise enough that people will be able to experience improved outcomes in their health.
“Everyone can achieve better health and vibrant longevity through individualized solutions rooted in comprehensive testing,” Vibrant Wellness states on its website.