SAN JOSE — The final deal terms have been approved to sell one of the Bay Area properties a bankrupt developer managed to finish before his real estate empire collapsed — and more sales are in view.
The pending property purchases arise from 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 big apartment complex in downtown San Jose developed by Acharya is poised to be bought — although at a price cut from the purchase value that was initially proposed, according to federal court documents.
Plus, a court-appointed receiver has hired a real estate broker to sell three more properties, two in Santa Clara and one in Sunnyvale, with price targets in the millions for each of the sites, records on file with a U.S. District Court show.
And deal terms have been crafted for the purchases of the ground-floor commercial spaces in a mixed-use development on El Camino Real in Santa Clara that’s called Madison Place.
San Francisco-based Carmel Partners, which specializes in the ownership of residential buildings, has agreed to buy the 101-unit apartment complex at 138 Balbach St. in downtown San Jose.
After conducting a due diligence assessment of the new apartment building, Carmel Partners decided it wanted to pay a bit less than the original proposed price of $54.2 million.
“As a result of due diligence, the buyer requested a reduction in the purchase price and, after negotiations, the receiver has agreed that a fair reduction is $750,000,” court records filed on July 30 stated.
The new and final price is $53.45 million, according to the federal court documents.
Separately, the court receiver has hired SVN Capital West Partners as a broker to handle the sale of a number of Acharya properties.
The properties involved in the most recently disclosed sales efforts include these three:
— 1313 Franklin St. in Santa Clara, a mixed-use project of residences and 14,500 square feet of retail and restaurant spaces. The sale involves the ground-floor commercial spaces. The price range is $6.7 million to $8.5 million.
— 1364, 1374, and 1378 El Camino Real in Santa Clara, the commercial spaces in the Madison Place mixed-use complex. The target price range was $3 million to $4.5 million. Three different buyers have emerged and are willing to pay a combined price of $4.2 million. The residences aren’t involved.
— 560 S. Mathilda Ave., a mixed-use project in Sunnyvale. The target sale range is $4.5 million to $5.5 million for office or commercial spaces on the ground floor.
For the 138 Balbach apartment complex in downtown San Jose, the buyer and seller now must go through the formality of closing escrow and recording the property purchase.
JLL, a commercial real estate firm, marketed the property in the effort that led to the Carmel Partners purchase deal for the Balbach apartments. A precise timeline wasn’t immediately available for the official completion of the purchase.
“The property was aggressively marketed” by JLL, a court filing stated.
Despite the price reduction for the Balbach Street apartments, the receiver, David Stapleton, stated the latest price represents a good deal for creditors who are owed money by Acharya, as well as investors in Acharya’s projects who are seeking to recoup some of their funds.
“Even with the reduction, the proposed sale is still the best offer that the receiver obtained,” the receiver asserted in the court filing regarding the Balbach apartment complex.