SAN JOSE — A lender has seized ownership of a big San Jose office building whose loan was delinquent, a fresh reminder of the feeble state of the Bay Area commercial real estate market.
The office building that a lender now owns through a foreclosure proceeding is located at 110 Baytech Drive in north San Jose’s Alviso district, documents filed on March 19 with the Santa Clara County Recorder’s Office show.
Alviso Park, an LLC comprised of individual real estate investors, was the entity that had previously owned the building and allowed the property to tumble into foreclosure.
In 2019, the Alviso Park entity paid about $14.4 million to buy the building, which totals 58,400 square feet.
Money360, an online marketplace for real estate loans, provided to Alviso Park in 2019 a loan totaling $16.3 million, the county records show.
The mortgage delinquency represents the second time in about a year that a real estate loan for the building has landed in default.
In August 2022, a notice of default was filed against the building. County records show that within the next several days, the default was rescinded, an indication that the mortgage payments were back on track.
But the loan went back into default in August 2023. That delinquency ultimately proved fatal to Alviso Park’s ownership of the office and research building.
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The delinquency and foreclosure don’t appear to result from an empty office building.
Vacant buildings that produce zero revenue can often doom a site’s finances because the property owner doesn’t have enough revenue to pay off the mortgage on the building.
In the case of 110 Baytech, however, the building is fully leased to Lyten, an up-and-coming green tech company.
San Jose-based Lyten, whose headquarters are a few doors away, has created and is producing a lithium-sulfur battery that can use cheaper materials than conventional batteries.