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

A fire-damaged home in Walnut Creek, California, sold for precisely $1 million on Thursday.

The accepted offer came significantly over listing price. The two-story, four-bedroom initially listed for $850,000 and immediately incurred a bidding war as well as the attention of perplexed onlookers. The deal closed Thursday.

The realtor who sold it, Melinda Byrne with the firm Key Realty, tells CNBC that while California may be an anomaly compared to the rest of the country’s real estate, this particular home sale was nothing out of the ordinary.

“I was really surprised at all the hoopla this has caused because to me, it’s a great listing,” Byrne said, referring to local reports circulating the listing. “We sell homes that are fixer-uppers, regularly.”

Byrne said nearly 100 interested parties contacted her in a three-day period. She received eight offers within those three days and by the time they landed on a buyer, five more made offers in case the selected ones didn’t work out.

The sale comes amid a broader countrywide housing cool-off. Home sales in June dropped to their lowest level since April 2020, as construction costs have forced homebuilders to focus on the high end of the market, leaving much of the demand for cheaper homes unsatisfied.

Byrne said though the house is damaged, with the garage, laundry and family room are all gone, the bones are still there. Experienced flippers can skip the tear-down and re-build within six months, she said.

“You see the wiring, you see what’s behind the walls,” she said. “You see everything you get with this one.”

Byrne said the buyer is an experienced investor who will re-do the house and put it back on the market — likely, for an even higher price.

Most home flippers have their own team of contractors, architects and designers, meaning they don’t have to wait as long for the construction lags as the rest of regular home buyers, she said. For these types of buyers, they can get a renovation done in four to six months.

Suburban flight

Single-family homes in the suburbs around San Francisco Bay Area and surrounding cities are selling for hundreds of thousands of dollars over list price, often triggering bidding wars with all-cash offers.

Walnut Creek is one of the San Francisco Bay Area suburban neighborhoods where demand skyrocketed amid the Covid-19 pandemic as residents looked to move out of dense urban areas and into homes with more space. The average price for a home sold has risen more than 20% from last year, according to data by Byrne’s real estate firm.

Walnut Creek is less than an hour’s commute from San Francisco, and is also known for some of the area’s best schools and walking distance to both trails and shopping and dining and equestrian activities. 

“You get a sense you’re away from the hustle and bustle but urban enough to feel like you’re not out in the boondocks,” Byrne said.

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Article source: https://www.cnbc.com/2021/08/19/this-fire-charred-silicon-valley-home-just-sold-for-1-million.html

“This was a wonderful site that is near transit in one of the hottest real estate markets on the planet,” said MidPen President Matt Franklin.

But despite the fact that there were over a dozen other offers, MidPen was able to grab the site with the help of a $14 million loan from the Community Housing Fund, a new $150 million affordable housing fund established a year ago by Facebook and two nonprofits — Partnership for the Bay’s Future and Destination: Home.

“We were able to move very, very quickly thanks to the Community Housing Fund,” Franklin said.

On Wednesday the fund announced that it had made its first investments: $40 million that will provide key funding for four developments that will create about 500 units of affordable housing.

In addition to 160 units on Sonora Court, the fund will provide $9.75 million for predevelopment of a 94-unit project in San Jose’s West San Carlos Urban Village; $5.8 million for an undisclosed building in Alameda County; and $8.3 million for development at Lighthouse at Grace, which will house 100 at-risk formerly homeless families at 155 S. 11th Street in San Jose.

The funds are administered by the Local Initiatives Support Coalition, an organization led by former San Francisco Planning Commission President Cindy Wu.

Wu said that the fund is “looking for developers committed to extremely low income populations” in the five-county Bay Area.

“Nothing has greater impact on transforming lives and breaking inter-generational cycles of poverty than housing stability,” said Wu.

There is currently $60 million to $70 million more in loans in the works, she said, adding, “We have a strong pipeline.”

The Community Housing Fund is part of Facebook’s $1 billion commitment to affordable housing, and to the Partnership for the Bay’s Future, a collaborative effort to “produce, preserve, and protect affordable homes in the Bay Area, and to ensure this region remains a diverse place where all people are welcome and can thrive.”

While affordable housing developers rely on low-income affordable tax credits and affordable housing bonds to bankroll construction, it’s much harder to borrow money for predevelopment work, which includes land acquisition, design, legal services and environmental review. That is what the Facebook fund is focused on.

The MidPen development will include 32 units for formerly homeless families and 32 units targeting very low income households. The rest will be workforce housing for low-to-moderate income families.

The fund offers “an enormously helpful financial product for groups like MidPen trying to build deeply affordable housing right in the middle of Silicon Valley,” Franklin said.

In a note to employees, Facebook CFO David Wehner put the fund ahead of its goal of funding five projects within the first year. He expects two more projects to be funded before the end of this year.

• A four-bedroom home in Walnut Creek, California, just closed for $1 million, two weeks after it hit the market.
• That’s well below the median list price for the ZIP code, but the house was nearly destroyed by fire.
• “Bring your contractor, architect, and designer: this is more than a fixer,” the listing said.

The Bay Area real estate market may be hot, but one property was especially so.

In spite of being “stripped to the studs” because of a two-alarm fire last year, a four-bedroom, two-bath house in Walnut Creek, California, closed for $1 million, just two weeks after it was listed for $850,000, Realtor Melinda Byrne of Key Realty told Insider.

“This one is ready to start fresh,” the listing said. “Opportunities like this are rare to make dramatic changes to a home and floor plan.”

Read more: The 7 best suburbs worth moving to right now, where people earn more money and homes are cheaper

“Great neighborhood, large lot, and close to shopping and conveniences,” it continued. “Bring your contractor, architect, and designer: this is more than a fixer.”

Byrne said she had thirteen offers before she could mark the listing “pending,” and that was still getting requests from buyers who wanted a spot on the backup list. The property is no longer available.

The median list price in Walnut Creek — about 28 miles east of San Francisco — is $1.2 million, according to Redfin, but Byrne said houses routinely go for $2.1 million, depending on size and condition.

As the daughter of a contractor, Byrne said the property is actually a better bargain than it might first appear, due to the location and the fact that the mid-century floor-plan is in need of a significant update.

“Fixer-uppers usually have walls,” she said. “In the case of this property, it’s literally transparent.”

With a good school system, lots of local shops, access to recreational trails, and an hour’s drive to San Francisco, suburbs like Walnut Creek are seeing extraordinary demand over the past year.

Byrne said listings are now down 50% compared with 2020, and that there is effectively zero available inventory in her market — the one house for sale already has three offers.

Previously in June, a heavily vandalized “house from hell” in Colorado Springs was listed for $590,000 and got 72 offers in five days. Both are signs that buyers are willing to look past severe defects in order to get their hands on a promising property in an unprecedentedly tight market.

Article source: https://www.businessinsider.com/bay-area-burned-out-house-sold-for-over-850k-cash-2021-8

Do you follow Bay Area real estate? You’re here, so I’m guessing “yes” and we can assume you’ve heard about the house in Berkeley that just sold for $1 million over its asking price.

Let’s be clear; it didn’t sell for $1 million over. It sold for $1.15 million over. Twice its asking price, which has to be some kind of a record. It’s certainly being treated as one.

Two days after the deal closed the story hit local media, and then the national media — up to and including Sioux City, Iowa. Most of the stories have a “man bites dog” sort of quality to them, further proof of the wackiness that defines Bay Area real estate — amplified, if you can believe it, in the pandemic market.

Listed for $1.15 million, which already buys you a mansion in Sioux City, the home, known forever forward as The Home That Sold For $1 Million Over Asking, closed escrow at $2.3 million, which seems remarkable even after hearing its listing agent somewhat dazedly call it a “unicorn” and a series of nonplussed neighbors and real estate industry insiders explain how COVID has created this world where a backyard, a home office and a garage — even taken separately , forget about all of them in one package — will trigger a bidding frenzy. In this case, the frenzy didn’t stop until 29 offers were in. One of them was for twice the asking price.

It’s a satisfying explanation: market conditions plus once-in-a-lifetime value proposition equals record-setting sale. I’m not buying it, but it’s satisfying.

This was definitely an exceptional listing. It’s located on a quiet, almost rural cul-de-sac near Tilden Park. It’s got 2,448 square feet of turn-key living space including that all-important home office. The listing includes an empty adjacent lot that pushes the total footprint to .27 of an acre (11,000 square feet) and guarantees that nobody can build next door and block your view.

About that view.

It’s amazing. Stupendous. Once-in-a-lifetime. San Francisco, the Bay, maybe three bridges, and unblockable. It’s the best view in the area. Metaphorically it’s worth a million dollars. Is the home worth $2.3 million, though?

Well, yeah, something close to that; definitely worth a whole lot more than $1.15 million, and here’s why:

In a perfect world, Realtors arrive at asking prices by studying recent sales of similar nearby properties: “comps.” Unfortunately for these sellers, this home has no comps.

Sales in this neighborhood are uncommon; only six since 2018, a much longer period of time than Realtors like to use when determining comps. None of those six sales measured up to the one sold last week. They were too small, or their lots were too small, or they had partial (or non-existent) views. Still, all but one sold for more than $1.15 million and that one was half the size of last week’s sale, on a postage stamp-sized lot. Not a comp.

We can still figure out what this place is worth, though; if we take only the sales with views (partial or otherwise), we get an average sale price per square foot of $735, which we can then multiply by 2,448 (square feet of last week’s sale). What do we get? $1.8 million. We’re getting close, but we still need to figure out the value of an extra 5,000 square feet of land.

Fortunately, a nearby active land listing — 5,000 square feet with “filtered” views” — does the trick. Add in its $350,000 asking price and we’re at $2.15 million, making $2.3 million a not-unusual closing price and eliminating the need for a nationwide media blitz.

So the question isn’t “who’d pay twice asking” but instead “who’d list their home for half its value?” Weren’t they taking a huge risk?

Actually, no. It probably took a pretty good pitch from their agent, but the fundamentals are sound. They make you want to douse yourself in bleach, but they are sound.

See, in an overheated, under-inventoried market, home offices and even killer views aren’t enough. You’ve got get people through the front door. Insane bargains are probably too good to be true, but you’ve got to go see, right?

A few of the 29 offers received were probably for a few hundred thousand more than $1.15 million, but those were from naive buyers and agents. In general, I’m guessing every experienced agent that went through this listing knew it was worth at least $2 million and told their clients to ignore the asking price. Replace what you’ve read with this reality and what’s left is a tale about a house that sold for a little bit more than it was worth, and real estate agent who figured out how to get a ton of free publicity.

Larry Rosen is a San Francisco-based writer, editor, podcaster and recovering former Realtor. He is a guest columnist and his viewpoint is not necessarily that of the Examiner. The Market Musings real estate column appears every other week.

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Article source: https://www.sfexaminer.com/news-columnists/bay-area-real-estate-offers-house-sale-of-cards/