Residential project in Los Altos faces auction due to default

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LOS ALTOS – A lender is poised to seize a plot in Los Altos, where a prestigious apartment building of nearly 200 units was planned in the swanky city, according to public records.

The project would now add 196 housing units to the upper-class population, but it is currently unclear when – or if – the project would be built should foreclosures occur.

The future of the residential project became unclear after the lender, Loancore Capital Credit REIT, filed a default notice on March 18 warning that the property could be seized by the lender.

The lender has now scheduled a public auction for the site, according to filings filed June 21 with the Santa Clara County Registrar.

According to applications, the auction should take place at the end of July.

The property, located at 5150 El Camino Real in Los Altos, is to be sold to “the highest bidder,” according to the sale notice.

However, in such auctions, if no bidder appears on the spot during the auction, the property is often formally sold to the lender through a proxy. This procedure then completes the foreclosure of the loan.

Then, since financial firms do not usually seek to develop or own foreclosed property on a long-term basis, the lender usually looks for a permanent buyer of the foreclosed property.

The borrower of the overdue loan is 5150 ECR Group, a subsidiary controlled by Dutchints Development and its CEO, local developer Vahe Tashjian.

In 2018, Loancore Capital Credit provided a loan of USD 42 million to 5150 ECR Group.

The loan came at a time when the Dutchints Development subsidiary paid $ 48 million for a 3.8-acre plot of high-density homes.

“The group of owners remains committed to bringing this project to life,” Tashjyan told the news organization in March 2021.

Cities in the Bay Area, including Los Altos, are under pressure to bring in their share of completed housing units in the next few years to help address the region’s severe housing shortages across nine counties.

“Overall, the project reflects the desired and appropriate development intensity of the El Camino Real shopping area and corridor,” wrote Sean Gallegos, Associate City Planner, in a 2019 report for Los Altos City Council.

The report also confirms the number of units in the project.

“It reaches the maximum allowable building density, which contributes to the achievement of the city’s housing goals,” the city staff said in a report.

The project will consist of two five-story condominium buildings with 172 apartments along El Camino Real and two three-story townhouses at the rear of the project with 24 apartments, Gallegos writes in the report.

“The goal is to create a great place to live while promoting sustainability, pedestrian friendliness and public transportation,” wrote Tashjian and Dutchints Development as part of a proposal presented at the end of 2018 to Los Altos officials.

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