Empty 250,000 SQFT eBay-Leased North San Jose Campus Defaults on $88.1MM Loan as Value Craters 59%

Why this matters

This default underscores the acute distress persisting in the US office sector, particularly in tech-centric markets like San Jose. The collapse in value—nearly 60%—reflects a confluence of deteriorating fundamentals: sustained vacancy, tenant flight, and a recalibration of office demand post-pandemic. That the asset was fully leased to a marquee tech tenant before vacancy suggests a broader structural shift rather than isolated credit risk. For institutional investors and lenders, this signals heightened caution is warranted when underwriting office assets in innovation hubs where remote work and downsizing remain entrenched. The involvement of a major Korean asset manager and a regional capital partner highlights the global reach of capital now grappling with impaired office collateral, raising questions about cross-border risk appetite and portfolio resilience. From a lending perspective, the default on a sizeable bank loan points to tightening credit conditions and the potential for increased loss provisions, which could further constrain liquidity for office owners. Ultimately, this episode exemplifies the ongoing repricing of office real estate risk and the challenges of repositioning or exiting large suburban campuses in markets where demand is structurally impaired.

Editorial analysis · AI-assisted

On the RET wire

• The 149th San Francisco story tracked on the wire in July 2026. All San Francisco coverage →
• Disclosed office deal value tracked in July 2026: $22.3B across 73 reported transactions. All Office coverage →

Computed from Real Estate Trail’s own tracked coverage

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