South Bay tech campus is taken by lender in real estate foreclosure

"The lender paid $100 million through a foreclosure to take back a 10-building campus known as Terra Bella Tech Park. The trustee for the proceeding publicly posted the results of the foreclosure. The unpaid loan debt at the time of the foreclosure proceeding was $123.1 million, the trustee's report stated. No parties or individuals bid for the campus, allowing the lender to take the campus."

"The foreclosed properties, which had been owned by affiliates of Zappettini Capital Management, are located near the interchange of U.S. Highway 101 and North Shoreline Boulevard. Zappettini Capital, a real estate and investment firm with roots in the floral business, obtained a $120 million loan in 2019 from Citi Real Estate, according to Santa Clara County property records. The loan foreclosure for the Mountain View tech park is the latest example of the financial problems that haunt the Bay Area office market. Sky-high vacancies, slumping rents, plunging property values and a growing number of loan defaults remain a challenge for many of the region's office buildings."

"The Mountain View loan default and potential foreclosure are a stark contrast to a rosy assessment that Citi Real Estate Funding, German American Capital, and JPMorgan Chase Bank filed in 2019 regarding the tech campus, which is known as the Zappettini portfolio. The city of Mountain View is currently developing a growth plan, known as the Terra Bella Vision Plan"

Terra Bella Tech Park, a 10-building office and research campus in Mountain View, was seized by Citi Real Estate Funding through a foreclosure on Sept. 17. The lender paid $100 million in the foreclosure while the unpaid loan debt stood at $123.1 million, and no other parties bid, allowing the lender to take ownership. The properties had been owned by affiliates of Zappettini Capital Management and sit near the U.S. Highway 101/North Shoreline Boulevard interchange. Zappettini obtained a $120 million loan in 2019 from Citi Real Estate. The foreclosure underscores Bay Area office struggles—high vacancies, falling rents, plunging values, and increasing loan defaults. The city is developing the Terra Bella Vision Plan.

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