Two East Bay office buildings have flopped into separate loan defaults and face foreclosure and seizure due to the delinquencies, fresh evidence of weakness in the commercial property sector.
One of the office buildings is in downtown Berkeley and the other is in downtown Oakland. Both properties are near BART train stops in the urban centers of those respective cities.
Constitution Square, a three-story office and retail building at 2168 Shattuck Avenue in downtown Berkeley. (Google Maps)
Here are the details of the two real estate loan defaults:
— A downtown Berkeley mixed-use office and retail building known as Constitution Square at 2168 Shattuck Avenue is in default on an $11.8 million loan that was obtained in 2018. An affiliate headed up by Harvest Properties, a veteran Bay Area developer, and Independencia Asset Management owns the building whose loan is in default. JPMorgan Chase Bank is the lender.
— A downtown Oakland office tower at 1700 Broadway has defaulted on a $10 million loan that was issued to the building’s owner, an affiliate controlled by La Jolla-based HP investors. The tower’s owner obtained the loan in 2020. The lender is Bank of the Sierra.
The two loan defaults for the prominent buildings suggest that the post-coronavirus economic maladies that have afflicted the commercial property markets in the Bay Area have yet to run their course.
Some experts believe more office and retail buildings could be seized by their lenders in the wake of loan delinquencies.
Sharply rising vacancy rates and softening rents now plague numerous office markets in the Bay Area as companies curb their appetites for office space.
That ominous dynamic, in turn, has raised the specter of financial woes and loan defaults for more properties.
Source:: The Mercury News – Entertainment