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Matteson Cos. Sells 370 San Aleso Ave.

SUNNYVALE, CA-In order to maximize proceeds, the Redwood-based real estate investment group works with a new San Francisco-based firm to complete a defeasance of the CMBS loan on the property

By Brian K. Miller | Updated on December 28, 2006

SUNNYVALE, CA-Matteson Cos. has sold a 53,150-sf office building here for $16.25 million or $306 per sf. The building is leased by Microsoft Corp. and Chelsio Communications. The new owner is an undisclosed institutional investor.

In order to make the asset more attractive, Matteson retained San Francisco-based Capital Defeasance Group LLC to structure and complete a $10.3-million defeasance of its CMBS loan on the property. The CMBS loan had three years remaining and an 8% interest rate.

Capital Defeasance Group principal Greg Stranger tells GlobeSt.com that in Matteson’s case, without the defeasance a buyer would have had to put up much more equity than is required for a typical property acquisition and also would have had to pay an above-market interest rate. “In this case, the premium to complete the defeasance was less than the haircut the seller believed he would take [on the sale price] if it required a loan assumption,” Stranger says.

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