AllianceBernstein is taking over a 152,300-square-foot office building in Santa Clara.
The Tennessee-based investment and asset management firm seized ownership of the structure at 2390 Mission College Boulevard in a loan foreclosure, the East Bay Times reported. The deal was conducted through an AllianceBernstein affiliate.
Real estate firm PCCP obtained a $72 million loan for the property from AllianceBernstein in 2022. PCCP defaulted on the loan in January, prompting lender AllianceBernstein to pay $21.7 million to take the building back through foreclosure.
The office vacancy rate in Silicon Valley — defined by Colliers as Santa Clara County plus Fremont — was 16.4 percent in the first quarter, a small dip from 16.6 percent in the fourth quarter last year, The Mercury News reported. The city of Santa Clara hasn’t been so lucky with a 28.8 percent office vacancy rate last year.
Still, the area saw a string of tech leasing deals at the end of last year. Snowflake and Robinhood leased 773,000 and 128,700 square feet, respectively, in Menlo Park. Astera Labs and Nvidia moved into new spaces in north San Jose of 154,200 and 101,600 square feet, respectively. Amazon snapped up 217,800 square feet in Mountain View.
Meanwhile, in San Francisco, office vacancy remains more than double that of Silicon Valley, ticking up to 36.6 percent last quarter.
The artificial intelligence boom could prove to be a godsend for owners of empty San Francisco office buildings. CBRE estimated in a report last month that the influx of AI companies and their employees could slash the city’s office vacancy rate in half by the end of the decade. Between 50,000 and 60,000 new jobs are expected in the next five years.
Downtown San Jose similarly maintains a high office vacancy rate of 30.6 percent in the first quarter, according to The Mercury News.
— Chris Malone Méndez