Bay Area office values just took another reality check, courtesy of Concord. The Concord Technology Center, a two-building office campus just outside the city’s downtown, has been sold out of receivership for about $45.3 million, a steep markdown from the roughly $148 million it commanded in 2018. The complex totals about 477,500 square feet and includes a 13-story tower and a four-story building, now in the hands of a new owner after a stint under court-appointed control.
An affiliate of Beverly Hills investor AXS Opportunity Fund was the buyer, according to The Real Deal. The outlet calculated that the new price tag represents roughly a 69 percent haircut from what Switzerland-based Partners Group paid eight years ago, underscoring how far some suburban Bay Area office assets have fallen.
Industry tracker CoStar cast the Concord sale as another data point in a split-market story. Certain San Francisco submarkets have seen a lift from recent tech hiring, while other areas are still stuck in the doldrums and trading at sharp discounts. CoStar also noted that the campus was highly leased when it last changed hands, but a maturing loan combined with rising vacancies eventually pushed the property into distress.
How the loan fallout put the campus on the block
The Concord Technology Center did not hit the market by choice. It landed in receivership after its owner defaulted on a loan tied to several California properties, according to an earlier report from The Real Deal. Partners Group had taken out roughly $400 million in financing that included the Concord campus, and when the loan soured, lender Wells Fargo moved to pursue judicial foreclosure in Contra Costa County. The court appointed Stapleton Group as receiver, clearing the way for the property to be marketed for sale.
Distress across the East Bay
The Concord sale is not an isolated event. Analysts say it is part of a broader wave of bank-driven ownership changes across the East Bay, where large office loans are being squeezed by soft occupancy and maturing debt. In downtown Oakland, an affiliate of Deutsche Bank recently took control of three office towers through a deed-in-lieu filing, a multi-hundred-million-dollar transfer that highlights how heavily leveraged office portfolios are being hit, as one recent debt drama noted, per Hoodline…