Elliston Vineyards, a 121-year-old complex has now a new owner: a joint venture of Asia investors. After paying down $1.75 million in cash, the four investors are reportedly ready to plunk down more money to renovate the complex and keep it operating as a winery and event center.
“They like the property, they feel the land is valuable and that the building has historical value,” Wang said.
Donna Flavetta, the longtime primary owner of the 8.5-acre property until it was seized through a foreclosure in August 2010, is expected to continue to operate the business as a tenant. Lender CMR Mortgage sold the complex to the new owners.
“This is good for the winery,” Flavetta said. “Things are still in the early stages. But the plan, at this point is to upgrade the winery.”
Burdened by heavy debt because of mortgages on the property, Flavetta put the six-building site up for sale in 2008, with Triska handling the marketing. The asking price at that time was $5 million, with a $4.3 million mortgage against the property. By mid-2010, the asking price was down to $3.25 million. Recent attempts to auction off the property for about $2 million failed.

Nick Nardolillo faces several bad news these days. Fremont Bank has filed a lawsuit seeking to foreclose on the Livermore winery, where Nardolillo has been living for more than 10 years.

This could happen just because of the housing crash that hit the market in 2008. The problem is that Nardolillo and his winery partners took out more than half a million as a loan, but they being confident they can pay it back, they choose it as a short-term loan.

So right before the crash, they took out the loan, which they had to pay back by last September. But they couldn’t make it, as they still owe more than $310,000 plus interest, the lawsuit documents show.

The bank wants Nardolillo off the property, access to all the books as well as all of the proceeds of the land. Furthermore, the bank also wants the property sold so it can get its money back.

But this isn’t the only problem Nardolillo. The DA’s office is still investigating whether he lied about being a Fremont resident to keep his elected post at Ohlone College.

Unfortunately the holiday season doesn’t mean foreclosure freeze. East Bay has enriched its inventory of foreclosures with seven buildings as lenders have seized three big office projects.

The properties that were repossessed in recent weeks include an office buildings and adjacent parking lot at 1111 Jackson St. in downtown Oakland; an office building at 2015 Shattuck Ave. in Berkeley; and Stoneridge Corporate Plaza, a five building complex in Pleasanton near the regional shopping mail, the Alameda County records show.

These foreclosures are strong signs showing one weak point of this area – the office property market.

According to county files, BofA seized the 39,000 square-foot Oakland building and the 50,000 square-foot Berkeley building, both owned by a unit of realty firm Scanlan Kemper Bard Cos. This happened a couple of weeks ago.

In September, Metropolitan Life Insurance Co foreclosed the Stoneridge Corporate Plaza.

The present evaluation of the buildings show a far huge drop in their values before the housing crisis.

The Oakland and Berkeley buildings and the parking lot were bought by Scanlan Kemper back in 2007 for $61.5 million. Through the foreclosure BofA valued the two buildings an the lot at a combined $26.5 million, which means a 57% decline in only 3 years.

Bank of America may decide to sell the Berkeley building, which is empty and the Oakland building which is expected to lose several major tenant.

Now is the time for investors to show up, because "if you have cash, certainly there are deals out there for investors" said Ken Meyersieck, senior vice president with Colliers International, a commercial real estate brokerage.

"The investors will have to buy these buildings at cheap enough prices that they can undercut their neighbors with their rental rates," said Edward Del Beccaro, managing director with Grubb & Ellis, a realty firm.

The problem with East Bay office property market is that the area’s moribund economy is not creating many new jobs, so employers simply want new spaces at less expensive rental rates.

"In the East Bay, the only way you can rent your buildings is to steal tenants from other buildings," Del Beccaro said. "So you have to price at least 10 percent below your neighbors."

The ongoing foreclosures mean that the nose-dive in values for office buildings might not be over yet.

"We don’t have a bottom to office prices yet," Del Beccaro said. "Eventually, the foreclosures will create a new bottom."

According to a press release published by BRE Properties Inc. they purchased 2.4 acres of land downtown Sunnyvale, one block from the Caltrain station and adjacent to the Sunnyvale Town Center.

Santa Clara County property records show that BRE purchased parcels at 101, 201, 301 and 401 Town and County Village Way or roughly half of the 4.6 acre Town and County site from Capella Holdings at the end of August.

The old shopping center was demolished in April, and previously it sat empty for more than a year, and the site drew complaints from citizens and Sunnyvale County City Council member for its decrepit appearance and rat infestation.

Now the place is ready for construction, although the purchasing company’s spokesman said there is no timetable to begin construction on the site.

BRE is the third owner since January, when East West Bank foreclosed on the site after owners Sand Hill Property Co and RREEF ran into trouble developing the area. The full 4.6 acre Town and County property was purchased for $21 million by Peter Pau, who owns Sand Hill, and Capella. After purchase Capella bulldozed the abandoned buildings with plans to redevelop the site as a mixed use commercial and residential space when economic conditions improved. Sand Hill also owned the neighboring 36 acre Town Center project with RREEF until last year, when it went into foreclosure.

The construction planned by BRE normally will take three to five years, according to the spokesman. In addition they purchased a 6.6 acre site in northern Sunnyvale in March for 14.6 million.

Concomitant to the revenue reduction caused by soaring unemployment and lower asset prices, budget funding that was earmarked to support affordable housing programs has been directed to higher priorities in the precarious economic conditions that we find ourselves in today. Further, developers of affordable housing have invariably used income from the sale of tax credits to local businesses who, having no profits with which to offset these tax credits, are no longer in need of their acquisition in a considerably slower economy.

Ironically, many of the investors in these tax credits were banks who are now likely to be the last enterprises of all in need of taxable income solutions. Many banks have adopted such stringent lending policies that property developers in the South Bay have knocked on the door of previous financiers, only to find that the cupboard is bare.

The simultaneous stemming of state funding for affordable housing and also the lack of revenue from the sale of tax credits has posed a formidable challenge to developers pursing this niche market.

While many would view the current climate to promise great returns on affordable housing, numerous projects in the Santa Clara Valley have ceased progress and many development sites remain unattended at a standstill.

The housing shortage in the South Bay and its surrounds continues in the face of ever lower land values, low interest rates, and lower construction costs. Indeed the only increase in price appears to be the price of affordable housing, for it is still in high demand. It is within this conundrum that humble short sale may present itself to a prospective buyer. When a financial institution is owed far more than the current market price of property, it will diligently try to bring the prospect of recovering a portion of that loss into its investment management policies.

In this respect the short sale of partially completed affordable housing projects may offer the most lucrative returns on investment capital.

Interest rates and infrastructure have been used in recent times to stimulate the local economy however, the busy hub that is San Jose proves to be resilient to economic downturns as it places its progress in the safe hands of the technological specialization for which the South Bay is renowned. Given the lack of further participation by banks in this area of commercial lending, it seems that the gallant Union Bank may be the only lender willing to still offer hope to South Bay developers. Without them development of the area will remain stagnant until clearer proof of an economic recovery. Of all these, unemployment needs a reprieve from its sharp increase to over 9% in the South Bay to pre-crisis times when it remained at under 7 %.

It is for these reasons that a viable short sale in San Francisco’s South Bay, that has received the assent of the mortgagee, will represent one of the most important investments along the road to economic recovery.

Tim Mulligan said that a three square mile area would be fogged. Approximately the area border Dolph Drive on the west, Bucknall Road skirts the north and on the east and south are Sonuca Avenue and Mistletoe Road respectively. The virus was detected in 2004 when 22 people were affected. The foreclosure crisis with the stagnant pools in abandoned houses worsened the situation. In June 2008 a dead bird was tested positive from the mosquito borne disease.

It is not that all who are bitten by the mosquito carrying the germ will get sick but the danger is there and the people have been warned. Backyards with stagnant pools should be drained and the doors and windows should be fitted with screens. The most vulnerable times are at dawn and dusk. Horses easily succumb to the disease and should be vaccinated. Half of the infected horses die.

The prime culprits are the abandoned pools in foreclosed houses. The larvas thrive on the slime and the mosquitoes multiply. The code enforcement officer Patrick Vicencio making the rounds remarks that these pools look like un-flushed toilet bowls.

A single pool can contain millions of these varmints – all potentially dangerous to humans.

An increase in foreclosures has meant an increase in the mosquito population. In the Bay Area the problem is serious. The Alameda County Mosquito Abatement District is taking on an average three complaints in a day. In Solano County the calls are averaging five per week. The inquiries are smaller in Contra Costa.

The vector control department is loaded with work. John Rusmisel the district manger of the mosquito control said that under normal circumstances there would not have been mosquito related problems in swimming pools. But with foreclosures the picture has changed. Pressure is being put on real estate firms so that they report to the authorities about neglected pools. The calm and temperate waters of swimming pools are perfect hatcheries for the female mosquitoes.

The problem is that without the green signal from the proper authorities one cannot enter properties of others. It would tantamount to trespassing. For this green signal the authorities would have to fashion new laws and ordnances – thus delaying matters.

Along with mosquitoes commercial foreclosures multiply in Bay Area. The Bay Area has reported recently in January 2010 the downing of shutters of five retail centers. All have fallen into bankruptcy. The total debt is over $39 million. The sign is ominous showing that consumers are still struggling and that the credit squeeze is not yet history.

The retail outlets got entangled in Chapter 11 bankruptcy cases – all of which had been filed in December 2009. Included in the list are a retail outlet in Fremont planning on an Asian theme, a strip center located in Newark, two centers in San Jose and one that has yet to be constructed with plans for an official and residential complex. George Labarth of Grubb & Ellis said, “We’re just beginning to see some of the retail properties that were purchased three to five years ago running into trouble.”

The main problem has been lack of customers. John Haveman of Beacon Economics said “Retail is really taking it on the chin. People are talking about holiday shopping being better in 2009 than 2008, but shopping was absolutely abysmal in 2008.”

However Gary Hansen co-owner of Aspenwood Plaza (shopping centre in Newark) who has filed bankruptcy has blamed the lender for his troubles. He complained of banks having hoarded the bailout funds but refusing to make loans. He said, “They refuse to loan to restaurants or retailers that want to be in our project, and they refuse to provide financing to developers such as ourselves.