Swiss Landlord’s Office Loan Default Spurs Bay Area Auction

A beleaguered office campus in Concord is searching for a buyer.

Court-appointed receiver Stapleton Group is working with Newmark to market the two-building Concord Tech Center for sale, the San Francisco Business Times reported. Wells Fargo, the largest tenant at the complex, renewed its lease for 257,000 square feet at the center last week, marking the largest office lease in the East Bay so far this year.

The Swiss owner of the 477,500-square-foot campus at 1655 and 1755 Grant Street defaulted on a $400 million loan backed by Concord Tech Center and three other California properties — including another East Bay business center with the Rosewood Commons in Pleasanton — when the loan matured last year.

Lender Wells Fargo pursued a judicial foreclosure in Contra Costa County Superior Court earlier this year. The Stapleton Group was appointed receiver of the property in May.

Switzerland-based Partners Group bought the office complex from Swift Real Estate Group in 2018 for $148 million, or about $308 per square foot. Swift stayed on as property manager. A Swift affiliate took out the $400 million Wells Fargo loan in 2018. As of January the unpaid principal amount was $382 million.

Newmark is accepting bids for the entire two-building Concord campus or the individual buildings.

The Concord Tech Center could become the latest office property along the Interstate 680 corridor that will sell at a steep discount after navigating loan issues.

FH One Investments bought the Sutter Square office property, at 1800 Sutter Street in Concord, out of receivership earlier this year for $13 million, or $74 per square foot. That price is 58 percent less than the $31 million that former owners Barker Pacific Group paid for the building in 2020. Barker Pacific defaulted on a $25.5 million loan last year, prompting the court to place the building in receivership.

Elsewhere in the East Bay, in May, Hall Equities bought Ygnacio Center in Walnut Creek from Hines Interests and Oaktree Capital Group for $111 million, or $210 per square foot. That same month in Walnut Creek, Peninsula Land & Capital purchased the 3003 Oak Road building for $22.5 million, or $107 per square foot.

— Chris Malone Méndez