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Tuesday, March 02, 2010 -
San Francisco-based Shorenstein Properties has taken ownership of the distressed Santa Clara Towers from Tishman Speyer in a consensual transaction.
The deal comes two years after Shorenstein bought the $51 million mezzanine loan on the 210,000-squar- foot building, at 3945 & 3965 Freedom Circle in Santa Clara.
Tishman Speyer spokesman Rich Matthews said the company and its lenders “explored various ways to restructure the debt, and ultimately decided that the best course of action would be for the mezzanine debt holder to assume ownership of the property.”
“The recent deterioration of commercial real estate markets across the U.S. has created many situations where the values of properties have fallen well below the debt that encumbers them. This is especially true in the Silicon Valley area and is true for Santa Clara Towers,” said Matthews.
Tishman Speyer bought the buildings from Birk McCandless for $213 million in 2007. One of the two granite towers is 100 percent leased to McAfee Inc.; the other has several tenants.
A Shorenstein spokesman confirmed that Shorenstein Realty Investors Nine, L.P., which is the holder of the mezzanine debt on Santa Clara Towers, has agreed to assume ownership of the two 11-story office buildings. After the transfer of ownership, the property will be managed by Shorenstein Realty Services, an affiliate of Shorenstein Properties.
“Consistent with all assets in its real estate portfolio, Shorenstein intends to invest new capital to maintain Santa Clara Towers’ premier status and high occupancy rate and to position the asset to take advantage of the anticipated recovery in the Silicon Valley office market,” stated Shorenstein.
Other assets currently owned and operated by Shorenstein Properties and its investment funds in the Silicon Valley and the mid-Peninsula office markets include 601 California Ave. in Palo Alto; 5000 & 7000 Marina Blvd. in Brisbane; 1400 & 1500 Seaport Blvd. in Redwood City; the Oyster Point Business Park in South San Francisco and Cisco Tower in Santa Clara. Shorenstein Properties owns and manages 24.2 million square feet nationwide.
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