Harvest Properties and HP Investors default on East Bay office debt
Harvest falls behind on $12M mortgage in Berkeley; HP defaults on $10M loan in Oakland
The owners of two East Bay office buildings face foreclosure after defaulting on multimillion-dollar loans tied to both properties
An affiliate of Oakland-based Harvest Properties and Miami-based Independencia Asset Management have defaulted on an $11.8 million loan linked to a three-story office building at 2168 Shattuck Avenue in Downtown Berkeley, the San Jose Mercury News reported. JPMorgan Chase is the lender.
An affiliate of San Diego-based HP Investors has also defaulted on a $10 million loan tied to a 10-story office tower at 1700 Broadway, in Oakland’s Uptown, according to the newspaper. The lender is Bank of the Sierra.
In 2018, Harvest and Independencia paid $19.7 million for the 36,000-square-foot office building in Berkeley.
At the time, Harvest said it was “very optimistic” about the Downtown Berkeley office market.
In 2017, HP Investors paid $13.3 million for the 31,500-square-foot office tower in Oakland, which includes 3,500 square feet of ground-floor shops and restaurants.
When each landlord fell delinquent from their respective loans was not disclosed.
Vacancy caused by a broad shift to remote work, coupled with higher interest rates, has devalued buildings and made financing for a growing number of landlords difficult. As a result, the number of defaults and building seizures has increased across the Bay Area and beyond.
In December 2022, Harvest Properties won approval to add a 210,000-square-foot, six-story office building to its three-building life sciences campus in Emeryville.
In October 2022, HP Investors bought the 207,800-square-foot Edgewater Park Plaza office complex near Oakland Airport for $35.7 million, or $172 per square foot.
— Dana Bartholomew