Big South Bay office building is bought, deal shows huge price plunge

SUNNYVALE An eye-catching South Bay office building that was once the headquarters of bankrupt biotech company andMe has been bought at a price that reflects a massive decline in the property s value The office building located at North Mathilda Avenue in Sunnyvale was bought for million according to documents filed on June with the Santa Clara County Recorder s Office The new owner was able to buy the building at a price that was far below what the sellers paid for the high-profile property a review of county documents shows Spear Street Capital acting through an affiliate is the new owner of the building according to the real estate records Stockbridge Capital Group had bought the building for million in the last full year before the coronavirus outbreak The coronavirus unleashed countless economic ailments worldwide due in part at least to wide-ranging government-mandated business shutdowns that chased people away from their workplaces The economic maladies that the coronavirus spawned weren t all straightaway visible at the outset of the outbreak in Over the last two years however it s become apparent that the coronavirus-linked consequences include a catastrophic meltdown in the values of office buildings and other commercial properties in the Bay Area That appears to be the development with the North Mathilda office building which once was leased to andMe a genomics and biotech company that in had a area value of billion but now is bankrupt The three-story building totals about square feet Stockbridge Capital bought the building promptly after andMe leased the property At the time Stockbridge bought the building the Silicon Valley office sphere was sizzling tech and biotech companies were grabbing and leasing sites at a fevered pace and demand for office space was sky-high The coronavirus outbreak changed all that The name of the office complex Grove is a reference to the fruit groves and orchards that once dotted that part of Silicon Valley as well as a long-gone Libby s fruit cannery that had operated nearby for decades The building s value peaked in early at million according to an estimate produced by the Santa Clara County Assessor s Office But by the building had an assessed value of million In January that estimated value had plunged to million an example of the collapse in office building values throughout the Bay Area Even the million value posted in early by county assessor functionaries appears to have been much too high Spear Street Capital s purchase of the building reflects a nosedive of in the value of the building compared to its prior sales price Ominously the latest price is also below its January assessed value The effects of slumping property values extend beyond the owners of real estate Property value trends can imperil revenue for an array of inhabitants agencies If real estate values turn soft in a region the decline could impede a crucial revenue stream for cities counties regional agencies and school districts In a twist the new owner of the building is the company that developed it and then sold it to Stockbridge In Spear Street Capital bought the property for million and in the developer obtained a million loan for the site county records show