Another One Bites The Dust..OR Death of a Zombie Building...

Posted by Expert Gadget Reviewer on Thursday, 29 April 2010

2300 Clayton Road, aka One Concord Center, aka "Zombie Building", a 15 story Class-A building in Concord Ca. has slipped into default.

Photo Credit: Susan Tripp Pollard/Inside Bay

This is the fourth time since November 2009, and the third time in the past 60 days, that I have posted a local Class-A building going into default. However, this one (as they say) is different. Different because it hits very close to home (literally down the street from our office), and different because it is a property where I have multiple clients, and a tremendous respect for the property management staff.

The story could be a bad horror movie, "Attack of the Zombie Buildings..." that keeps re-playing. It goes like this:

  • Large investors purchase Class-A building at the top of the market.
  • Market crashes - existing tenants close, consolidate, or simply disapear in the middle of the night
  • Ownership ends up "underwater", can't refinance, can't adjust rents, can't fund TI dollars
  • Brokers start avoiding the building for all the reasons listed above hence - no new tenants
  • Ownership stops making payments - building goes into default
The happy ending at the end of the story is after the unavoidable default, and foreclosure process, new ownership comes in and; lowers rents, funds TI dollars, and restores the former "Zombie Building" back to health. (and we all live happily ever after...)