SAN JOSE – A loan default rocked a San Jose project proposed by bankrupt developer Sanjeev Acharya and his firm Silicon Sage Builders, and posed additional financial challenges for Acharya, the focus of allegations of securities fraud.
A lender has filed notice that a defaulted loan has resulted in foreclosure of Silicon Sage Builder properties at 2149 Alum Rock Ave. could trigger in east San Jose. This is evident from documents filed with Santa Clara County officials.
Acharya and Silicon Sage Builders have created a real estate empire in the Bay Area that appears to have collapsed under the pressure of multiple problems.
Difficulties include widespread fraud allegations by the Securities and Exchange, Acharya’s Chapter 11 bankruptcy filing, and a series of loan defaults on a growing number of his company’s properties.
In one of the recent challenges for Acharya, a lender claims that a subsidiary controlled by Acharya and Silicon Sage Builders has defaulted on a loan totaling $ 5.98 million, according to public records filed on Feb. 24.
The property, which is pending foreclosure, is part of a location where Silicon Sage Builders is developing 796 homes and 30,000 square feet of retail and restaurant space in a large mixed-use development on and near 2101 Alum Rock Ave. suggested in San Jose.
In the SEC fraud case filed in the US District Court in San Francisco, Federal Judge Susan Ilston authorized a recipient to take control of the properties and operations of Acharya and his company Silicon Sage Builders.
An estimated 250 people who paid around $ 119 million to invest in Acharya and Silicon Sage Builders projects face the prospect of being betrayed by a financial web woven by the real estate developer, according to the SEC’s complaint.
Acharya filed for bankruptcy in January to reorganize his finances.
Among the notable debts listed in the bankruptcy filing:
– $ 45 million for a home loan related to a property at 42183 Osgood Road, Fremont. Acres Capital, based in New York, has been listed as a lender through an affiliate.
– $ 40.7 million for a home loan related to a property located on Almaden Road, San Jose, between 1821 and 1873. Acres Capital provided the funding.
– $ 39.6 million for a home loan related to a lot on Balbach Street in downtown San Jose. Silicon Sage Builders has developed and completed a residential complex called Aura at 180 Balbach in San Jose. Prime Finance Partners, based in Chicago, was listed as a lender.
– $ 13.9 million for a land loan at 37358-37482 Fremont Blvd., located in the Centerville area of Fremont. Bolour Associates, based in Beverly Hills, is listed as a lender.
– $ 8.3 million for a land loan at 41965, 41911 and 42021 Osgood Road in Fremont. Bolour Associates provided the loan.
– $ 7.9 million in a home loan and home loan for a lot at 1313 Franklin Street, Santa Clara. Bolour Associates is listed as a lender.
– $ 5.98 million for a land loan at 2101-2149 Alum Rock Ave. in San Jose. Parkview Financial, based in Los Angeles, is listed as a lender.
– $ 4.9 million for a land loan at 510-528 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 January 11th, lenders launched foreclosure proceedings to seize the property through a notice of default on a $ 3.5 million defaulted loan. The loan relates to the office and retail area of the property known as Madison Park.
– $ 2.9 million for a construction loan at 560 S. Mathilda Ave. in Sunnyvale. Acharya’s main company, Silicon Sage, is headquartered at this location.
– $ 1.8 million for a land loan on Alum Rock Ave. 1661, 1663 and 1665 in San Jose.
Parkview Financial REIT, the lender for the loan at 2149 Alum Rock in San Jose, said the borrower was in default on a loan issued in September 2020.
The September timeframe seems to be of interest as Acharya received this loan after already admitting to investors who made mistakes dealing with his real estate empire over the years.
At meetings with investors around August 2020, Acharya appeared to acknowledge that he had made a number of mistakes over the years, according to the SEC.
Acharya said he should have been more transparent with investors, according to the SEC’s fraud complaint.
“I should have done it,” Acharya said at an investment meeting. “At the time, I might have thought that everyone would return. So … I really didn’t bother going into details, but what I didn’t think was my mistake for not thinking of a downside scenario. “
Silicon Sage and Acharya painted an overly rosy picture of the prospects, prospects, and financial strength of the company’s various projects, according to the SEC.
“Since at least August 24, 2016, Silicon Sage Builders and all real estate development projects were no longer profitable except for one,” says the SEC complaint.