The two-tower property came to market this spring in a lender-driven disposition that followed a loan default by building owner Tishman Speyer Properties, which paid $190 million for the property in 1999. Sources tell GlobeSt.com that Divco West "will go hard next week," meaning its refundable deposit will become nonrefundable. The sale is scheduled to close escrow in the next couple of weeks.

With $160 million in financing from Morgan Stanley Dean Witter, Tishman-Speyer acquired the former Standard Oil of California headquarters in 1999 for $190 million and proceeded to fill it up with Internet-related tenants that were paying rents as high as $70 per sf per year. By early 2001, however, the dot-com boom was bust and the 1970's development was back to half empty.

Moody's downgraded the loan at the end of January, saying the property was 17.1% occupied and not generating enough cash flow to cover debt service or even all of the operating expenses. "Debt service and operating expenses are being paid from a cash collateral account that has a balance of approximately $56 million," stated the report. "Midland Loan Services, the special servicer, continues to explore resolution strategies for the debt."