Real estate: Buyers hunt deals for bankrupt developer’s Bay Area properties

SAN JOSE — More buyers have emerged for a bankrupt developer’s Bay Area projects, raising hopes that the potential property sales could help investors and creditors recoup some portion of the money they are owed.

The prospective property purchases are occurring through a federal court proceeding linked to a securities fraud case that’s been brought against bankrupt developer Sanjeev Acharya and his company, Silicon Sage Builders.

A court-appointed receiver is attempting to sell all of Silicon Sage’s properties in a quest to recoup some money for creditors and investors who entrusted their funds to Acharya.

The receiver has accepted offers for two Bay Area properties, documents filed with the U.S. District Court in San Francisco show.

The properties with potential buyers are located at:

— 1364 through 1378 El Camino Real in Santa Clara, a mixed-use project called Madison Place that features residences and commercial spaces.

— 138 Balbach St. in San Jose, a big downtown apartment complex.

The most recent potential deal has emerged for the Santa Clara building while the downtown San Jose apartments have drawn the biggest price tag so far.

In Santa Clara, the transactions involve the project’s commercial spaces, which could be a combination of office and retail. The potential purchases don’t involve the residences, which are for-sale units that were previously purchased by individual homeowners.

The commercial spaces slated to be sold are owned by a Silicon Sage affiliate called 1460 Monroe.

“The receiver has accepted three offers for the parcels that comprise the real property owned by 1460 Monroe,” a filing with the federal court stated. “The property is vacant retail or office space.”

The commercial spaces have addresses of 1378 El Camino Real, 1374 El Camino Real, and 1364 El Camino Real.

A different buyer would purchase each of the commercial spaces. The respective potential buyers are Shekinah Real Estate, The Gupta Family Trust, and Kui Ma.

The three buyers have struck tentative deals for purchases with a combined value of $4.2 million.

The lender that holds a mortgage against the property is a group of individuals. The receiver said that the lending group will receive $3.6 million after the three commercial spaces are sold.

In addition, the receiver hired a broker, Robin Santiago of SVN Capital West Partners to market the Santa Clara property.

“After a number of months of marketing of the units as a whole and individually, the receiver has accepted offers to purchase the property as separate units,” the receiver stated in the court papers.

As a result of the pending transactions, the creditors and the investors could receive roughly $177,000 from the proceeds of the sales to the three buyers, the receiver estimated.

The 138 Balbach St. apartment building, with 101 residential units, is slated to be purchased for $54.2 million, a filing by the receiver, David Stapleton, shows. JLL, a commercial real estate firm, arranged the potential purchase.

After paying JLL a commission and the payment of closing costs, several million will be left over to pay the creditors and investors of Silicon Sage and Acharya.

“Receiver expects that the receivership estate will net approximately $12.6 million from the sale” of the Balbach Street apartments, the court documents state.

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Apartment building at 138 Balbach St. in downtown San Jose, a 101-unit complex. // George Avalos / Bay Area Newsgroup

Article source: https://www.mercurynews.com/2021/08/05/real-estate-buyer-hunt-deal-bankrupt-developer-bay-area-property-fraud

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