Name: Real estate: Loan default rattles bankrupt developer's San Jose project
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Real estate: Loan default rattles bankrupt developer's San Jose project

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By | | Bay Area News GroupSAN JOSE — A loan default has rattled a San Jose project proposed by bankrupt developer Sanjeev Acharya and his company Silicon Sage Builders, creating more financial challenges for Acharya, who is the focus of securities fraud allegations.A lender has filed a notice that a delinquent loan could trigger a foreclosure of Silicon Sage Builder properties at 2149 Alum Rock Ave. in east San Jose, according to documents filed with Santa Clara County officials.Acharya and Silicon Sage Builders have fashioned a Bay Area real estate empire that appears to have crumbled beneath the pressure of multiple problems.&nbsp;The difficulties include wide-ranging fraud allegations lodged by the Securities and Exchange, Acharya’s Chapter 11 bankruptcy filing, and an array of loan defaults for a growing number of the company’s properties.In one of the latest challenges, a lender claims that an affiliate controlled by Acharya and Silicon Sage Builders has defaulted on a loan totaling $5.98 million, public records filed on Feb. 24 show.The property facing foreclosure proceedings is part of a site where Silicon Sage Builders had proposed the development of 796 homes and 30,000 square feet of retail and restaurant space in a big mixed-use development at and near 2101 Alum Rock Ave. in San Jose.As part of the SEC fraud case, filed in U.S. District Court in San Francisco, federal judge Susan Ilston has authorized a receiver to seize control of the properties and operations of Acharya and his Silicon Sage Builders company.An estimated 250 people who paid about $119 million to invest in projects launched by Acharya and Silicon Sage Builders face the prospect that they were defrauded through a financial web woven by the real estate developer, according to the SEC’s complaint.In January, Acharya filed for bankruptcy in an attempt to reorganize his finances.Among the notable debts listed in the bankruptcy filing:— $45 million for a construction loan linked to a property at 42183 Osgood Road in Fremont. New York state-based Acres Capital, through an affiliate, was listed as the lender.— $40.7 million for a construction loan connected to a property at 1821 to 1873 Almaden Road in San Jose. Acres Capital provided the financing.— $39.6 million for a construction loan associated with a site on Balbach Street in downtown San Jose.&nbsp; Silicon Sage Builders has developed and completed a residential complex at 180 Balbach called Aura. Chicago-based Prime Finance Partners was listed as the provider of the loan.— $13.9 million for a land loan at 37358 to 37482 Fremont Blvd. in the Centerville area of Fremont. Beverly Hills-based Bolour Associates is listed as the lender.— $8.3 million for a land loan at 41965, 41911 &amp; 42021 Osgood Road in Fremont. Bolour Associates provided the loan.— $7.9 million for a construction loan and land loan for a site at 1313 Franklin St. in Santa Clara. Bolour Associates is listed as the lender.— $5.98 million for a land loan at 2101 to 2149 Alum Rock Ave. in San Jose. Los Angeles-based Parkview Financial is listed as the lender.— $4.9 million for a land loan at 510 to 528 S. Mathilda Ave. in Sunnyvale. Bolour Associates is the lender.— $3.6 million for a land loan at 1368 El Camino Real in Santa Clara. On Jan. 11, lenders began foreclosure proceedings to seize the property through a&nbsp; notice of default filing for a $3.5 million loan that’s delinquent. The loan relates to the office and retail section of the property, which has been built and is known as Madison Park.— $2.9 million for a building loan at 560 S. Mathilda Ave. in Sunnyvale. Acharya’s primary company, Silicon Sage, maintains its headquarters at this location.— $1.8 million for a land loan at 1661, 1663, and 1665 Alum Rock Ave. in San Jose.Parkview Financial REIT, the lender for 2149 Alum Rock in San Jose, stated that the borrower defaulted on a loan issued in September 2020.The September time frame would appear to be of interest because Acharya obtained that loan after he had already admitted to investors that had made mistakes over the years in how he had handled his real estate empire.&nbsp;In meetings with investors around August 2020, Acharya appeared to acknowledge that he had made some errors over the years, according to documents filed by the SEC.Acharya said he should have been more transparent with investors, the SEC’s fraud complaint stated.“I should have done it,” Acharya said at an investment meeting. “Back then, maybe my thinking was that everybody’s returns will come. So … I really didn’t bother to get into details, but what I was not thinking, what my mistake was that I wasn’t thinking a downside scenario.”Silicon Sage and Acharya painted an overly rosy picture of the outlook, prospects, and financial strength of the company’s array of projects, according to the SEC’s allegations.“Since at least August 24, 2016, Silicon Sage Builders and all but one of its real estate development projects have not been profitable,” the SEC complaint alleges.We invite you to use our commenting platform to engage in insightful conversations about issues in our community. We reserve the right at all times to remove any information or materials that are unlawful, threatening, abusive, libelous, defamatory, obscene, vulgar, pornographic, profane, indecent or otherwise objectionable to us, and to disclose any information necessary to satisfy the law, regulation, or government request. 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By | | Bay Area News GroupSAN JOSE — A loan default has rattled a San Jose project proposed by bankrupt developer Sanjeev Acharya and his company Silicon Sage Builders, creating more financial challenges for Acharya, who is the focus of securities fraud allegations.A lender has filed a notice that a delinquent loan could trigger a foreclosure of Silicon Sage Builder properties at 2149 Alum Rock Ave. in east San Jose, according to documents filed with Santa Clara County officials.Acharya and Silicon Sage Builders have fashioned a Bay Area real estate empire that appears to have crumbled...

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George Avalos

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Real estate: Loan default rattles bankrupt developer's San Jose project

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