South Bay Development Forecloses on BioSquare Silicon Valley
The commercial office campus was acquired for $50 million following a significant loan default.
Updated on Oct. 30, 2026 in Commercial
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South Bay Development Co. has officially taken ownership of the BioSquare Silicon Valley office campus through a foreclosure proceeding. The property was secured by the Los Gatos-based developer for $50 million.
Why it matters
The acquisition reflects a steep decline in commercial real estate value for the campus compared to its previous sale price. This transition follows a period of financial distress involving a substantial unpaid loan balance.
The $50 million purchase price represents a 65% decrease from the $144.5 million paid in 2018. At the time of foreclosure, the property held an unpaid debt balance of $167.9 million against a $207 million loan initiated in 2022.
The players
South Bay Development Co.
A real estate development firm based in Los Gatos that is the primary entity behind the foreclosure acquisition.
Pimco
A global investment management firm that provided the initial $207 million financing for the property in 2022.
United Overseas Bank
A multinational banking organization that held and eventually transferred the loan prior to the foreclosure.
The details
South Bay Development Co. assumed control after United Overseas Bank transferred the loan to the firm in January 2026. The property had previously undergone a renovation project by a PCCP-led group in 2024 before the eventual foreclosure filing in Santa Clara County.
Timeline
2018: A PCCP-led group acquired the property for $144.5 million.
2022: A real estate venture obtained $207 million in financing.
2024: The office park was revamped by the PCCP-led group.
December 2025: Pimco assigned the loan to United Overseas Bank.
January 2026: United Overseas Bank transferred the loan to South Bay Development Co.
Culture Shift
This foreclosure mirrors the broader market correction currently impacting commercial office real estate valuations. It signals a shift as developers acquire distressed assets at fractions of their previous peak valuations during the ongoing post-pandemic repricing cycle.
For local businesses and residents, this change in ownership may lead to shifts in property management or tenant occupancy strategies for the campus. The transaction highlights the significant cooling of the regional commercial real estate market.
The takeaway
The drastic drop in valuation underscores the current volatility in the office real estate sector. Property investors should note that capital structures from peak valuation years remain a primary source of foreclosure risk.
Further reading
Find more updates on the local market in the San Jose Commercial section.
Source note: This article includes information reported by San Jose Mercury News.
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