Atlas Capital defaults on $18M loan tied to San Jose office building

Atlas Capital Investments has failed to keep making payments for an $18.4 million loan tied to a 78,200-square-foot office and research building in South San Jose.

The Saratoga-based investor has defaulted on the loan for the building at 5729 Fontanoso Way, the San Jose Mercury News reported. It’s linked to a life science tenant that apparently never occupied the building.

The lender, Santa Monica-based Evergreen Advantage, has threatened to foreclose on the mortgage and seize the 4.7-acre property.

Atlas Capital bought the property in May of last year for $27.4 million.

Two months later, Atlas leased the building to Khloris Biosciences, whose goal was to seek “a world without cancer.” Dr. Lynne Bui, co-founder and CEO of Khloris Bio, is a principal at Atlas Capital, according to the Mercury News.

It appears that the Mountain View-based Khloris Bio never moved into the building, despite declaring the South San Jose address on its website.

The Mercury News took a look and found that “weeds have choked its landscaping and garden areas, debris litters the building’s pathways and entrance, and a padlock is fixed to the front door. The lobby was dark and abandoned. Three vehicles were parked in the surface lot next to the building.”

All that remained was a sign bearing the company’s name taped to the door.

In 2018, Khloris Biosciences raised $5 million in a venture funding round, according to Crunchbase. A year later, Bayer, acting through a subsidiary, announced it had invested in Khloris. 

— Dana Bartholomew

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