Tishman Speyer and San Francisco-based Shorentstein, which acquired the mezzanine debt on the Santa Clara Towers project two years ago, consented to have Shorenstein take ownership of the buildings as the best solution in light of falling values.

"Tishman Speyer and its lenders explored various ways to restructure the debt, and ultimately decided that the best course of action would be for the mezzanine debt holder to assume ownership of the property," Tishman Speyer said in a prepared statement. The statement cited the "recent deterioration of commercial real estate markets across the US," saying that the plunge in values "has created many situations where the values of properties have fallen well below the debt that encumbers them," as is the case with the Santa Clara Towers.

Shorenstein bought the $51.1 million mezzanine loan on the towers at a discount, according to a GlobeSt.com report at the time. The loan was a junior tranche of an approximately $168-million financing package for Tishman's $225-million acquisition of the towers in June 2007, when the property was known as McCandless Towers. The towers are situated within Silicon Valley's "Golden Triangle" between Highway 101, Route 237 and Interstate 880.