Zappettini Family Defaults on Mountain View Tech Campus

The Zappettini family office has defaulted on $120 million in commercial mortgage-backed security loans tied to a 100,000-square-foot tech campus in Mountain View.

The San Francisco-based office led by John Zappettini received a notice of default from an undisclosed lender of loans tied to the Terra Bella Tech Park at 850-900 Shoreline Boulevard, 1212-1305 Terra Bella Avenue and 1330-1350 West Middlefield Road, the Silicon Valley Business Journal reported.

The family bought and developed the 10-acre office and industrial park with 17 buildings in the 1970s, then turned it into a tech campus. In 1921, it tried to redevelop it into a mixed-use village, with homes and commercial properties, according to its website.

A default notice filed this week gives the Zappettinis 90 days to pay off the default amount. If they fail, the lender will record a notice of sale, Steven Hoffman, a real estate attorney based in Sunnyvale who is not connected to the situation, told the Business Journal.

The Business Journal reported in February that the Mountain View tech campus had been heading toward foreclosure or a loan modification after the owner defaulted on a $120 million mortgage debt.

Loan servicer reports obtained in January showed Zappettini Investment Company failed to repay the mortgage debt by its June 2024 maturity date. The initial loan default was first reported by The Real Deal that month.

Citi Real Estate Funding issued the two loans — one for $65 million and a second for $55 million — and then pooled them into commercial mortgage-backed securities deals.

As of last summer, leases for 40 percent of the tech park’s office, light-industrial and research and development buildings were set to expire within six months, a key factor in the default.

The Zappettini family was originally in the wholesale flower importing business and formerly used some of the Mountain View properties for its wholesale operations, according to its website.

The Zappettinis sold multiple parcels in Mountain View to Google in 2011, which the tech giant sold a few years later to the Irvine Company, according to public records. They sold another property to Google in 2016 for its now-abandoned Google Landings project.

The family also owned almost 2 acres in the San Francisco Flower Mart from the 1950s until they sold it to Kilroy Realty in 2016 for $31 million in cash and $56 million in stock.

— Dana Bartholomew