Sales begin for bankrupt Bay Area developer real estate empire
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SAN JOSE – A downtown San Jose apartment complex is set to become the first property to be unloaded in the real estate empire coins auction from a bankrupt developer involved in a federal fraud case.
The first property to find a potential buyer – priced at $ 54.2 million – is a large apartment building at 138 Balbach St. in downtown San Jose, according to documents filed July 16 with the US District Court in the fraud case related to bankrupt developer Sanjeev Acharya.
Court-appointed receiver David Stapleton is trying to sell properties owned by Acharya, chairman of Silicon Sage Builders and a real estate executive who is at the center of a Securities and Exchange Commission fraud proceeding.
âThe receiver has accepted an offer from Carmel Partners Realty VII to purchase the property,â documents filed with federal court indicate.
The proposed buyer is a subsidiary of Carmel Partners, based in San Francisco, specializing in the ownership of apartment buildings.
The apartment building on Balbach Street enjoys a prime location a short distance from the trendy and trendy South First district, or SoFA district, and the city’s convention center.
The residential complex, which was completed in 2019, also appears to be in good health.
“Almost all” of the 101 residential units are currently leased, according to court documents.
The receiver hopes to sell Silicon Sage’s range of properties at prices high enough to allow investors and creditors linked to the Acharya projects to recover at least some of the money owed to them by Acharya.
âThe property was marketed aggressively and had been on the market before,â said the receiver, regarding attempts to find a buyer for 138 Balbach St.
JLL, a commercial real estate company, handled the marketing of the apartment complex and arranged the transaction on behalf of the receiver. JLL has made at least 47 tours of the building and conducted several rounds of offers, according to court documents.
Many other properties owned by Acharya, some complete, some partially built and some completely undeveloped are also expected to be marketed for sale by the receiver.
The Bay Area properties involved in the marketing efforts were originally proposed or developed by Acharya and the company he runs, Silicon Sage Builders. The Securities and Exchange Commission accused Acharya and Silicon Sage of fraud. Silicon Sage was placed in receivership this year.
Silicon Sage’s projects and properties in San Jose, Fremont, Santa Clara, Sunnyvale, Morgan Hill and Hayward face varied futures, according to files filed with the U.S. District Court in San Francisco.
The Balbach Street apartment transaction in downtown San Jose, if carried out under the terms outlined in the court documents, could achieve the main goals of the property sale.
The sale of the property will be used to pay off the lender on the apartment complex, as well as pay for the mechanic’s privileges that eight different contractors have filed against the building. The lender will be paid approximately $ 39.9 million. The contractors owe a total of $ 400,000.
After paying JLL a commission and paying closing costs, there will be several millions left to pay the creditors and investors of Silicon Sage and Acharya.
“The receiver expects the estate in receivership to bring in about $ 12.6 million from the sale,” the court documents say.
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